Unforgettable Experiencesresource.capetown.gov.za/documentcentre/Documents...From opportunity to experience 02. About the CTICC 04. Forewords 05. Introduction by the CEO 10. ... events

Unforgettable Experiences

From opportunity to experience 02

About the CTICC 04

Forewords 05

Introduction by the CEO 10

Event highlights 12

Business overview by COO 16

Economic contribution of the CTICC 26

Sustainable performance 34

A culture of excellence 34

Nurturing our world 36

Contributing to society 39

Expanding our horizons 41

Looking forward 43

Governance, compliance and risk management 44

Financial report 50

Annual financial statements 50

Report from the Auditor-General 51

Report of the directors 54

Statement of financial position 56

Statement of financial performance 57

Statement of changes in net assets 58

Cash flow statement 59

Notes to the financial statements 60

Detailed income statement 93

Directorate and administration 95

TablE of CoNTENTS

2011 Annual Report | 01

from opporTUNiTy To ExpEriENCEThe success of the CTICC is, and has always been, founded on its absolute commitment to delivering exceptional experiences for its clients and guests. This commitment extends far beyond mere service excellence, which is really considered to be an experience delivery vehicle, or a means to achieve brilliant experiences, rather than an end in itself.

This commitment begins with the creation of opportunities. However, the CTICC takes this one step further by harnessing the global shift towards an experience economy, and presenting its clients, employees and other stakeholders with the opportunities and means to forge lasting memories, create connections, foster relationships, achieve aspirations and build brands.

The CTICC recognises that clients and guests of convention centres the world over are increasingly expecting memorable events or excellent and unforgettable experiences, rather than just good products or reliable service.

While many businesses see this shift in customer needs as a challenge, the CTICC recognises it as an opportunity and, as this report shows, has responded by offering experiences that have the potential to transform its clients and their guests by adding significant value to their lives, rather than just meeting their needs or requirements.

The CTICC’s philosophy has always been one of creating experiences, rather than merely offering space to host events. Now, the wider global acceptance and understanding of the experience economy is presenting the centre with the opportunity to further extend its brand promise – for the benefit of its clients, staff and other stakeholders.

2011 Annual Report | 0302 | 2011 Annual Report

aboUT ThE CTiCCThe Cape Town International Convention Centre Company (Convenco) was established in 1999 as a collaborative effort between the City of Cape Town, the Provincial Government of the Western Cape and the business sector.

Convenco was formed as the holding company of the CTICC. The convention centre serves both local and international guests through the provision of services and facilities for events, exhibitions, conferences and meetings. Convenco is jointly owned by the City of Cape Town (50.2% shareholding), the Provincial Government of the Western Cape (25.1% shareholding), and SunWest International (Pty) Ltd (24.7% shareholding).

The primary rationale for the establishment of the CTICC was to have a positive impact on the community by ‘bringing meetings to Cape Town

in a world-class facility and to generate jobs and economic development’.

Over time, this objective has grown and evolved and, while the CTICC is still committed to delivering jobs and contributing to economic development, the centre’s vision is now:

“to become the best long-haul international convention centre by 2020.”

This vision is underpinned by the organisation’s key objectives, which are: • tomaximiseeconomicspin-off and job creation;• tofocusoninnovationand exceeding expectations;• toachieveserviceexcellencebybuilding capable and quality staff; and• tobecomeaworldleaderin sustainability initiatives.

In the past year, a fifth objective has been added by the CTICC’s primary shareholders and the centre is now also contractually committed to ensuring that it remains a fully self-sufficient city asset. The CTICC continues to raise the profile of Cape Town as a sought-after international leisure and business tourism destination, and is maintaining and growing the economic and social contributions it makes to Cape Town, the Western Cape Province, and the country as a whole.

Foreword by the Mayor oF Cape town

forEwordS

As an asset of the City of Cape Town, it is incumbent upon the Cape Town International Convention Centre (CTICC) not only to realise a profit for the City as its primary shareholder, but also to deliver on the mandate it has been set to benefit the city and its people by contributing to economic development and job creation, and raising the profile of Cape Town as a first-choice national and international tourist destination.

I am pleased to be able to confidently say that, over the past financial year, the CTICC has more than achieved these objectives and comfortably exceeded the targets agreed between the Convenco board and all the centre’s shareholders.

Despite a difficult economic background, exacerbated by the post-2010 reconciliation period and the lingering effects of the international financial crisis, the CTICC has resolutely stuck to its guns and got on with the business of creating exceptional events, conferences, exhibitions and conventions.

Having had the pleasure of attending many of these events, I speak from experience when I say that the CTICC’s commitment to service excellence and immaculately maintained facilities shines through, in every respect, regardless of the type of function it plays host to.

This excellence, combined with the obvious passion and commitment of its people, is undoubtedly at the heart of the centre’s continued success year after year. The CTICC truly is an asset of the city of Cape Town; one that is delivering a consistently solid return on investment and numerous sustainable benefits for residents of, and visitors to our city.

I look forward to watching these benefits multiply exponentially as the CTICC expands in the coming years and moves closer to realising its vision.

Alderman Patricia de LilleExecutive Mayor of Cape Town


Foreword by the preMier oF the western Cape

The Western Cape has rapidly built a reputation as a leading international destination for business and leisure tourists. The many first-class facilities and attractions the city and the rest of the province has to offer, such as the Cape Town International Convention Centre (CTICC), are a key contributing factor for this.

Since the CTICC opened its doors in June 2003, it has been Cape Town’s premier conference and events venue. Over the last eight years it has provided a platform for great minds, products and brands to come together, ideas to be shared, important issues to be debated and audiences to be entertained.

This Annual Report presents the CTICC’s achievements over the past twelve months and demonstrates how the CTICC has entrenched itself as a vibrant and dynamic part of Cape Town’s landscape since 2003.

I am therefore pleased that the CTICC, the City of Cape Town and the Western Cape Provincial Government have joined forces to expand the convention centre further. This expansion is part of a series of regeneration projects planned for the Cape Town Business District over the next few years.

I would like to congratulate the management and employees of the CTICC on the excellent work they have done in establishing the convention centre as a world-class events venue. May you and the centre keep growing from strength to strength.

Helen ZillePremier of the Western Cape

Foreword by the CtiCC Chairperson

While South Africa’s hosting of the 2010 FIFA World Cup™ helped to shield our country from the full effects of the global economic crisis and resulting recession, the past year has been something of a reality check for business in this country, with many organisations seeing the delayed negative effects of the financial crisis beginning to filter through and impacting on their bottom line.

Despite this challenging economic environment, the CTICC has managed to deliver another exceptional set of results for the 2010/2011 financial period. Just as importantly, the centre has succeeded in significantly enhancing its global brand awareness over the past year, illustrated by the receipt of a number of national and international awards.

This excellent overall performance is especially noteworthy given that 2010/2011 was also the first full year in which the CTICC operated independently of Amsterdam RAI’s direct management support. The success achieved over this period is a credit to the foundations that RAI helped lay, as well as the dedication of our CEO, Rashid Toefy, the CTICC management team, and all the CTICC staff members.

On behalf of the Convenco board, I would like to commend the CTICC on another solid year. My grateful appreciation, also, to my fellow board members for the valuable support and encouragement they have offered throughout the year. Finally, I would like to thank our main shareholders, the City of Cape Town and the Provincial Government of the Western Cape, for their ongoing support. I look forward to the exciting period to come in which the expansion of the centre will enable it to build on its success and extend the positive impact it has on Cape Town, the Western Cape and South Africa.

Andrew BoraineCTICC Chairperson


Contribution to National Gdp

r2.68bnContribution to provincial GGp

r945mil

driving the experienCe eConoMyThe integration of the so-called ‘experience economy’ into the way the CTICC operates has been a key strategic focus over the past 12 months. It represents a significant paradigm shift from the delivery-based concept of ‘service’ to a more holistic approach that goes beyond mere service to create exceptional and unparalleled experiences. We see this experience ethos as a central component of the sustainability of our business and are committed to continuing to build it into every area of the CTICC.

As CEO of the Cape Town International Convention Centre I consider it a great privilege to be a part of the success story that is the CTICC. The 2010/2011 financial year was the next chapter in this unfolding story and, despite being another challenging period in the life of the CTICC, it was, once again, a highly satisfying and rewarding year.

The CTICC remains a valuable contributor to the South African economy with R2.68 billion added to national Gross Domestic Product (GDP) and R945 million to Western Cape Gross Geographic Product (GGP) during 2010/2011 as a result of the centre’s operations. The steady growth in revenue year on year also means that the CTICC is meeting its mandate to be a self-sustaining and profitable business operation.

The centre’s success is measured in far more than financial figures. The past year saw us moving even closer to achieving our vision of becoming the best long-haul international convention centre by 2020.

This vision encompasses every aspect of our business, and is underpinned by a dedicated focus on integrating environmental, social and economic sustainability into everything we do and a passion for creating exceptional client and guest experiences.

taking sustainability to the next levelThis year, for the first time, the CTICC has published a dedicated Sustainability Report, which can be accessed on our website and should be read in conjunction with this annual report. More than merely an overview of our sustainability achievements, this report demonstrates our commitment to ensuring that our success going forward is built on a foundation of sustainability in all its facets.

At the CTICC we recognise that sustainability is a key strategic priority rather than a secondary business consideration. Without an absolute commitment to ensuring our sustainability, and that of our communities and environment, we cannot expect to achieve our vision. For this reason, the past financial year saw us striving, in every area of our business, to put economic, social and environmental sustainability considerations at the core of our operations while embedding even more of a sustainability mind-set and culture across our organisation.

CtiCC expansionThe CTICC’s vision for increasing its space, reach and effectiveness, is being realised as the plans to create an expanded ‘convention precinct’ gained significant traction over the past year. Not only will this expansion serve to boost Cape Town’s reputation as a globally competitive business destination, it will also contribute to the creation of more than 2 380 jobs annually by 2018 and unlock construction and development opportunities to the value of over R4.5 billion. What’s more, a recent feasibility report by economists from the University of Cape Town’s Graduate School of Business stated that the expansion could result in the CTICC’s contribution to national GDP increasing from its current R2.7 billion to over R5.1 billion per annum by 2018. Details of the proposed expansion and its potential impacts are included later in this report.

In conclusion, I would like to convey my appreciation to the Convenco board, the City of Cape Town, the Provincial Government of the Western Cape, our valued suppliers and loyal clients for their continued support and encouragement. My sincere thanks, also, to the CTICC management team and all staff members for their dedication and hard work. The CTICC is more than just a building, but rather a space that the talented staff bring alive.

Rashid ToefyChief Executive Officer


iNTrodUCTioN by ThE CEo

EvENT hiGhliGhTS July 2010 to June 2011

12 | 2011 Annual Report 2011 Annual Report | 13

National Conference

South African Principals Association National Conference September 2010

The Green Building Council of South Africa National Convention 2010September 2010

South African Clothing and Textile Workers’ Union Congress September 2010

South African Council of Shopping Centres National Congress 2010October 2010

Hedge Funds 2010 November 2010

Municipal Water Quality Conference June 2011

G20 Development Working Group June 2011

Attn:

1 000

1 500

500

1 500

400

600

150

Exhibition

Baba Indaba 2010 July 2010

RMB Winex 2010 August 2010

Cape Homemakers Expo 2010 September 2010

Fab Bridal Spring Show 2010 October 2010

Cape Town International Boat Show 2010 October 2010

The Baby Expo Cape Town 2010 October 2010

FNB Whisky Live Festival November 2010

Western Cape Property Expo 2011 February 2011

14th Design Indaba Expo February 2011

Indian Expo 2011 March 2011

Decorex Cape 2011 April 2011

Good Food and Wine 2011 May 2011

Attn:

15 000

10 000

27 301

6 000

15 000

15 000

10 000

1 000

13 000

500

45 000

40 000

International Conference

International Union of Food Science & Technology (IUFoST) Conference August 2010

The UBUNTU Wound Healing Conference C/O African Conferences & Incentives September 2010

13th World Congress on Medical Informatics September 2010

10th World Congress of Nuclear Medicine 2010 September 2010

3rd Lausanne Congress on World Evangelization October 2010

Africa Com 2010November 2010

21st Annual International Association of Operative Millers (IAOM) Middle East & Africa District Conference & ExpoNovember 2010

World Social Security ForumNovember 2010

Site International Conference 2010December 2010

The NEPAD ICT Africa SummitDecember 2010

Investing in Africa Mining Indaba 2011 February 2011

The 14th International Design Indaba Conference February 2011

The 2010 Joint Conference of the African Society for Human Genetics, and the Southern African Society for Human Genetics March 2011

4th Pan African Pain Congress March 2011

European Hepato-Pancreato-Biliary Association 2011April 2011

Annual Conference of International Organisation of Securities CommissionApril 2011

Wind Power 2011 May 2011

15th International Conference on Near Infrared Spectroscopy 2011May 2011

Mobile Health Summit 2011 June 2011

Attn:

1 500

600

3 000

3 000

6 000

800

600

1 500

250

300

3 000

2 000

300

500

1 500

1 000

320

350

400

Special Event

Bryan Adams July 2010

Cape Winemakers Guild, Formal Tutored tasting and Showcase August 2010

Maties Kleinsêr Finals August 2010

SA’s Got Talent AuditionsSeptember 2010

Blacks Only! Comedy ShowNovember 2010

Kinky Afro November 2010

Rick Ross Live in SA December 2010

One night only, Abdullah Ibrahim & Ekhaya February 2011

Idols Cape Town February 2011

MK Music Awards February 2011

Cape Town International Jazz Festival March 2011

Dancers don’t Cry March 2011

Trevor Noah’s Goodbye... For now April 2011

Pitbull Concert April 2011

Planetshakers City Church June 2011

Old Mutual Trophy Wine ShowJune 2011

Attn:

1 500

640

1 500

500

1 500

8 000

5 500

1 500

3 500

3 000

15 000

1 500

1 500

8 000

600

700

Banquet

The Association for the Advancement of Black Accountants of Southern Africa Dinner June 2010

Veritas Wine Awards October 2010

SAMSA Seafarers AwardsOctober 2010

The 1000 Women United against Domestic Violence Luncheon May 2011

Attn:

500

800

300

1 000

Trade Fair

Mauritian Trade Fair 2010 July 2010

Destinations Expo 2010 August 2010

Africa Energy Week 2010 September 2010

Apparel, Textile, Footwear and Machinery Trade Fair (ATF) 2010 November 2010

The Cape Premier Yearling Sale 2011 January 2011

India Clothing & Textile Trade Show 2011 March 2011

Professional Beauty 2011 March 2011

African Utility Week 2011 March 2011

Sign Africa 2011 May 2011

Marketing Indaba 2011 May 2011

Apps World Africa Expo 2011 June 2011

Attn:

200

1 700

150

2 000

3 000

500

4 000

350

1 500

280

1 000

Other Event

Hyundai Motor Co-operation (HMC)/ RSA: United Touring Company July 2010

SAICA Medical Schemes for Trustees Seminar October 2010

Media24 Magazines Editors’ ForumNovember 2010

Telkom Road Show November 2010

Expo Summit Africa 2011January 2011

Sainsbury’s Supermarkets Conference 2011 March 2011

Microsoft Developer Days May 2011

Allan Gray Road ShowMay 2011

Attn:

20

70

80

1 500

175

150

800

450

revenue generated during the last year

r143.3milnew jobs were created

7870

bUSiNESS ovErviEw by Coo

iMproving eFFiCienCiesThe CTICC remains committed to improving efficiency, enhancing customer centricity and aligning its operations with international best practices. The centre underwent some organisational restructuring during the year under review.

The Operations, and Food and Beverage Divisions were streamlined into a single division under the direct management of Aage Hansen. This has allowed the CTICC to unlock greater synergy between these two areas. By putting a single executive manager in charge of operational and catering requirements, service delivery has been

Despite being a challenging period in the life of the CTICC, the 2010/2011 financial year was once again a resounding success. While the aftershocks of the global recession contributed to a slight decline in the total number of events hosted by the CTICC, the centre delivered revenue of R143.3 million for the period under review, which translates into an operating profit of R 33.2 million. In the process of generating this financial return for its shareholders, the CTICC has also remained a significant contributor to regional and national economic development and employment creation.

streamlined and there is an even greater sense of accountability amongst all staff members for the achievement of personal and divisional targets. The restructuring has already begun to bear fruit, with positive feedback received from clients.

As part of this realignment, Megan Arendse, who previously headed up the Operations Division has taken over the position of General Manager of Commercial and Business Development. Megan’s previous experience heading up the operational aspects of the CTICC is invaluable in her new role and has ensured greater understanding and co-operation between the divisions.

She replaces Joey Pather, who previously headed the Commercial and Business Development Division before being promoted to Chief Operating Officer.

In this position, Joey’s vast experience across many areas of the CTICC has proven highly beneficial to the organisation. His understanding of the challenges facing the managers and staff, particularly within the Operations, Catering and Commercial Divisions has allowed him to drive improvements in performance and service delivery over the past year.

driving peak perForManCeThe performance measurement of the CTICC by its shareholders is based on more than mere financial returns. It also includes a particular focus on the achievement of specific sustainability criteria. To drive this focus and ensure accurate performance measurements, the following key performance indicators, as contained in the centre’s five-year business plan, have been agreed upon, between the Cape Town International Convention Centre Company (Pty) Ltd and its parent municipality – the City of Cape Town. These indicators are aligned with the City of Cape Town’s Integrated Development Plan.

OPPORTUNITY


They have also been cascaded through the organisation to serve as a measure of the individual performance of each employee and manager. The ability of each person to deliver on these personal targets is now a key consideration in their performance assessment and informs their annual remuneration and bonus payments.

The organisational KPIs are listed below, along with an indication of the actual performance against these targets by both the 2009/2010 and 2010/2011 financial years.

Event type 2011 2010

International conferences 40 39

National conferences 31 37

Exhibitions 18 18

Trade fairs 14 12

Banquets 42 51

Other events 297 296

Special events 59 100

All events 501 553

events and oCCupanCyDuring the period under review, the CTICC hosted a total of 501 events, which is broken down as follows:

By measuring organisational performance against this broad set of assessment criteria, the CTICC is not only able to accurately gauge its progress in terms of its commitment to being a self-sustaining organisation, it is also succeeding in embedding a high performance culture and driving sustainability, transformation and growth – both of the centre and its employees.


key performance indicators

18 | 2011 Annual Report

2010/11 2009/10

Category Measurement Target Actual Target Actual

1 Economic impact (spin-off)

Contribution to GDP compared to budgeted target

R2.3 billion

R2.6 billion

R2.7 billion

R2.3 billion

International delegate days

Number of days attended by international delegates at international conferences compared to budgeted target

200 000 225 657 200 000 206 847

Jobs created Number of direct and indirect jobs created compared to budgeted target

9 000 7 870 9 000 7 080

Events Number of events hosted compared to budgeted target

500 501 500 553

2 Human capital development

Actual cost of training of permanent and temporary staff as a percentage of total salary cost compared to budgeted target

5% 9% 5% 7%

3 Customer centricity and service excellence

Rating achieved in independent customer satisfaction survey (out of a hundred)

75% 77% 75% 76%

4 Sustainability Actual savings on electricity consumption compared to budgeted target

5% 7% 5% 6%

5 Procurement Percentage procurement from BBBEE- compliant suppliers (in terms of BBBEE Act 53 of 2003) (minimum of 50%)

50% 58% 50% 54%

6 Budget

Revenue Actual revenue generated compared to budgeted target

98% 106% 98% 100%

Expenditure (cost control)

Actual direct and indirect expenditure compared to budgeted target

98% 96% 98% 98%

Capital expenditure budget

Percentage of projects (budgeted for) that have been commenced and/or completed compared to budgeted target

80% 83% 80% 86%

For 2010/2011 the actual performance per category has exceeded the agreed targets in all categories except in the number of jobs created, which was below the budgeted target as a result of the effect of the global economic recession.

While the total number of events has declined marginally year on year, the agreed target for the 2010/2011 financial period was met, despite the very challenging economic circumstances and the natural decline in events in the period following the 2010 FIFA World Cup™.

Exhibition hall occupancy was down from 60% in 2010 to 53% in 2011. Nonetheless, this remains an excellent occupancy figure by international standards.

Of particular relevance is the number of large national and international conferences and special events secured and hosted by the CTICC. Some of the highlights include:

• the Design Indaba Conference and Exhibition, which attracted 32 000 visitors to the CTICC;

This focus, as well as the CTICC’s popularity as a world-class, accessible and flexible special events facilitator, is evidenced in the number of special events bookings confirmed for the coming financial year. Many of these will raise the profile of the CTICC locally and internationally and serve as a valuable precursor to the opportunities that will become available to events organisers through the expansion of the centre in the coming years. Some upcoming event highlights for 2011/2012 are:

The Osteology Conference 2012 – 1 000

South African Dental Association

Conference – 800

Congress of World Association for

Infant Mental Health – 600

The 29th IPA Publishers

Congress – 1 000

30th International Congress of

Psychology – 6 000

International Academy of

Pathology – 2 000

• the Cape Town International Jazz Festival, that attracted an audience of over 33 000 people; and

• the Cape Premier Yearling Sale, which was the first indoor horse sale in the world and saw the CTICC’s main exhibition space converted into stables.

The CTICC also hosted numerous professional association gatherings and industry conventions, such as the 3rd Lausanne Congress on World Evangelization that attracted more than 6 000 delegates over 10 days and the Investing in Africa Mining Indaba, which saw 6 500 delegates in attendance.

The hosting of 40 international conferences (39: 2009/2010) generated a total of 225 657 delegate days, which represents a significant boost to the economy and tourism industry of Cape Town and the Western Cape.

Despite a decline in the number of special events, the financial contribution of these events to the CTICC’s bottom line has increased. Special events remain a key focus of the CTICC’s business model, as does increasing the centre’s attractiveness to organisers of linked exhibitions and conventions.

6 000

4 500

0

3 000

1 500

An

tici

pat

ed n

um

ber

of

del

egat

es

events

City

saddles

up

for

sale

YEARLING

AUCTION

TO RAISE R100M

MONIQUEDUVAL

To cater for

the

horses

300

individualportable

stables will be

built

in

theexhibition

halls.More

than

2500

bales

of

special hay

were

procured

toensure

that the

horses needs were met.

In

addition,

thecentrewifi put up 150 stable

beds

for the grooms,

who

will

be

on site 24

hours, Mr Pather

said.

TBA

spokesperson,

Robin

Brass,

said

the association was

excited about hosting

theevent

in

the city centre.

He

said

the

concept

ofhosting

theevent

in a CBD

was

ideal as everyoneloves

Cape

Town .

Traditionally events like this

are

held

on

afarm

in

Johannesburg.

We thought offmding

anew

way

forour buyers

tosavour

the

experience. We chose theCTICC

because

of

its

closeproximity

to

the

V&A

Waterfront

and other

tourist attractions. We want our

Continued

on

page

3

CapeTown

isplaying host to

guests

of a different kind at

the

Cape

Premier

Yearling

Sale,which

started

today,

Thursday

January

27

and ends

tomorrow,

Friday

January

28,

at

the

Cape

Town

International

Convention

Centre

(CTICC).

This

isthe first time

an

event

of this nature

istaking place in a

Central

Business

District.

CTICC

chief operating officer;

JoeyPather;said the centre would

be

home

to

300

thoroughbred

yearlings

from

South

African

breeders

before

they

are

auctioned.

The

event

ishosted

by the

Thoroughbred

Breeders

Association

Vaughn

K ster from

colts that willbeauctioned

CAPETOWNER, THE

Thursday, 27 January 2011, p. 1

ÑEvents

likethese

help

raise

the

chys

profileÒ

From

page

1

buyers

toenjoy the experienceand

where

better

than Cape Town,

everybody

loves visiting thiscitMÔ

Mr

Bruss

said.

He

said that event organisers

expected buyers from 13

different

countriesfrom Europe, North and

South

America

and

the

Middle

East.Ñ

midnight

on Saturday, we

took

over

the

exhibition

halls.

Between

Saturday January 22

and

MondayJanuary

24,we

were doing

all

the

setting up and

the horses

arrived

onTuesday January 25,Ôhe

said.Buyers were given the opportunity

toCape Town permanently

Mr Pather said the CTICC

has

worked

closely with the organisers

to

ensure

that

the event runs

smoothly.

The CTICC saidthe sale wifi be

officiallyopened

byPremier Helen

Zille at 4pm

today.

South

AfricaÒs iconic group,

Mango

Groove,

wifientertam

the

buyers. The auctioneer

will be

BrianMakwabarara.

The

associationÒs

website

said

thatMrMakwabarara

isthe

chairman

ofHammer

&Tongues

inZimbabwe.

He

was mentored

by

the

late

Peter

Lovemore, who

sold

on

agrand

scale

as

priricipal

auctioneer

to

the

TBA

for

near on 30years.

Cape Town Routes Unlimited

(CTRU)

chiefexecutive Calvyn

said

aunique

event like this

would

have

apositive effect on the

tourism industry

He said this kind ofeventhelped

toraise the cityÒsprofileinvarious

ways.

ÓHaving

lifestyleevents

likethis

isdefmitelyinlinewith the type of

exhibitionswe

would

liketosee

in

the

city.

ÓThese

lifestyleevents usually

ÕBeIow

Allen

Nelfrom Lawervlei

grooms one ofthe

colts

in its

stable.

ÕLeft:Two

ofthe colts intheir

portablestable

set

up especially

forthe event.

CAPETOWNER, THEThursday, 27 January 2011, p. 3

City saddles up for horse sale

MONIQUE DUVAL

Cape Town is playing host to

guests of a different kind at the

Cape Premier Yearling Sale,

which started today, Thursday January

27 and ends tomorrow, Friday

January 28, at the Cape Town International

Convention Centre (CTICC).

This is the first time an event of

this nature is taking place in a Central

Business District.

CTICC chief operating officer,

Joey Pather, said the centre would be

home to 300 thoroughbred yearlings

from South African breeders before

they are auctioned. The event is

hosted by the Thoroughbred Breeders

Association (TBA) of South

Africa and is expected to atrract

more than 3 000 people and raise

approximatelyR100 million.

It is also the first thoroughbred

horse sale to take place in a convention

centre in a major city.

To cater for the horses 300 individual

portable stables wifi be built

in the exhibition halls. More than 2

500 bales of special hay were procured

to ensure that the horses

needs were met. In addition, the centre

wifi put up 150 stable beds for the

grooms, who will be on site 24

hours, Mr Pather said.

TBA spokesperson, Robin Bruss,

said the association was excited

about hosting theevent in the city

centre. He said the concept of hosting

the event in a CBD was ideal as

everyone loves Cape Town .

Traditionally events like this are

held on a farm in Johannesburg. We

thought of fmding a new way for our

buyers to savour the experience. We

chose the CTICC because of its close

proximity to the V&A Waterfront

arid other tourist attractions.

We want our buyers to enjoy the

experience and where better than

Cape Town, everybody loves visiting

this city; Mr Bruss said.

He said that event organisers

expected buyers from 13 different

countries from Europe, North and

South America and the Middle East.

midnight on Saturday, we took

over the exhibition halls. Between

Saturday January 22 and Monday

January 24, we were doing all the setting

up and the horses arrived on

Tuesday January 25, he said.

Buyers were given the opportunity

to view the horses yesterday

(Wednesday January 26) before being

treated to a trip to Table Mountain.

The auction is set to start today,

where Mr Bruss said the yearlings

could sell for anything between

R50 004) and R4 million, each.

He said all the necessary testing

on the horses had been done last

week.

Owning a racehorse is a lifestyle

choice and what can be more attractive

to the rich and famous than coming

to the world s most beautiful city

to seek the horse of their dreams,

Mr Bruss said.

He said that although organising

the logistics of the event was complicated

he was confident thatall would

go well.

Mr Bruss said depending on how

the event goes, the association might

consider bringing the event to Cape

Town permanently.

Mr Pather said the CTICC has

worked closely with the organisers to

ensure that the event runs smoothly.

The CTICC said the sale will be

officially opened by Premier Helen

Zifie at 4pm today.

South Africa s iconic group,

Mango Groove, wifi entertain the

buyers. The auctioneer wifi be Brian

Makwabarara.

The association s website said

that Mr Makwabarara is the chairman

of Hammer & Tongues Auctioneers

in Zimbabwe.

He was mentored by the late Peter

Lovemore, who sold thoroughbreds

on a grand scale as principal auctioneer

to the TBA for near on 30 years.

Cape Town Routes Unlimited

(CTRU) chief executive Calvyn Gilfellan

said a unique event like this

would have a positive effect on the

tourism industry

He said this kind of event helped

to raise the city s profile in various

ways.

Having lifestyle events like this

is definitely in line with the type of

exhibitions we wouldlike to see in

the city.

These lifestyle events usually

attract the high end visitors who are

different to the leisure tourists.

These visitorsspend up toR3 500

in the city a day The uniqueness of

this event defmitely helps to raise the

profile of the city

It shows that we are dynamic and

resourceful. have no doubt that it

will go smoothly Mr Gilfellan said.

Vaughn Koster from Cheveley

Stud is pictured with one of the

colts that will be auctioned at the

Cape Premier Yearling Sale.

ATLANTIC SUNThursday, 27 January 2011, p. 4

Total number of eventshosted over the 12-month period under review


3000

KOPERS

VERWAG

Pure

perd

by

voibloed

-veiling

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150

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ingerig

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tad M

iljoenerande gaan vandag

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op die eerste

veiling

van jaaroud vullens in

dieMoederstad

bestee

word.

Perdeliefliebbers van feitlik oral

indiewOreidhet reeds indieMoederstad

aangekomom

tebie op 300 uitgesoekte

voibloed-vullens wat die

het

om

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renbaan

teword.

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Wes-Kaapse premier, me.

Helen

Zille,open

dieveiling dieeerste

in

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van

ngrootstad vandagom

16:00in

dieKaapstadse

Internasionale

(Kiks).

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sowat 3000 kopers

en

belangstellendes

wat

by die veilingverwag

word,

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van

die

Volbloed-Telersvereniging

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the eerste

perdeveiing

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nroot

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ook hoe gesog Kaapstad

geword

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as

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personeel van

die

Kiks

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saamgewerkmet

theorganiseerders

van

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alles

gladverloopen dat the perdenet

die beste sorg kry.

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is in die Kilts, se

uitsta]ruimte van

meer

as

7300 in gebou om dieperde

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die!veiling

te huisyes.

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met

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hulp van kenners

van

die

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en

die Keeneland-vereniging van

Kentucky

inAmerika.

Hulk

istussenR50 000 en R4 mujoen

elkwerd?

Suid-Afrika

isbekend

astelervan

kampioen-perde.

Die

afgelopejaar

hetverskeievan

dieperde wat hier

geteel

isinvan

diewØreld

segrootste

perdewedrennegepresteer.

Teen

gister het kopers van 13lande

reeds

opgedaag am die veiling by

te

woon

en daik nvulaan

teskaf

soos nkarnaval

Kaapstad.

Daar heers groot optirnisme

in

dieSuid-Afrikaanseperdewedrenbedryf

dat die eerste Kaapse veiling

van

;aaroud-vullensdierekords

sal

laat

spat. Die veiling word

vandag

en

mOre

inKaapstad

seInternasionaleKonferensiesentrum

gehou.

Van

die land se bestejongrenperde

sal

tekoop wees. Die

Baaise stoetplaas

Ascot behoort n

goele vertoning by

die veiling te lewer.

Avontuur, Oldiands, Klawervlei,

Daytona, Drakenstein enNormandy

is

van die ander plase van wie groot

dingeverwag

word.

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Queens

Plate sy eerste internasionale

wedren

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veilingvoorsien.

Volgens een van dieorganiseerders,

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Bruss,

sal n karnavalatmosfeer

heerswanneer

die veiling om

16:00 begin.

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deel

van

die veiling wees.

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groepMango

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het hy gesØ.

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geluk

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word.

F to:DENZIL

MAREGELE

BURGER (Kaap Stedelik)

Thursday, 27 January 2011, p. 6

Catering to tasteAs part of its commitment to innovation, the CTICC introduced a new food concept for public catering at events hosted in the centre. The concept, which was inspired by the need to create a more client-friendly environment and holistic catering experience, allows guests to select from an array of items – from international cuisine to traditional favourites – all with a strong emphasis on quality and value for money.

The new menu includes a wide range of fresh products, from sandwiches and wraps to themed ‘hot stations’ that offer Asian, Indian and Italian food. A selection of individual desserts is also available, as well as a special children’s catering outlet.

This new catering approach has eased congestion at shows and events, enhanced service delivery and improved the overall guest experience at the CTICC.

reinvesting in exCellenCeThe Food and Beverage Division and Operations Division remain key contributors to the CTICC’s bottom line, contributing R59 million and R16 million respectively.

The continued success of these business units is ensured through high levels of personal accountability that are instilled in all staff and managers. A decision was taken to ensure that the heads of department would be involved in all pre-convention meetings held between the CTICC and its clients. This has proved valuable for all parties as attendance of these meetings allows the department heads to offer recommendations to clients at the vital planning stage of their events.

The 2010/2011 financial year was a period of significant reinvestment by the CTICC into the

maintenance and improvement of its buildings and facilities. Noteworthy projects included:

• theupgradingofallrestrooms,including the installation of motion sensor taps and urinals and dual flush toilets to limit water usage; • theupgradeoftheballroomcarpet, raising the stature and appeal of this venue;• energy-efficientLEDlightingupgradeto all external building signage to improve the aesthetic appeal of the centre, allow for greater control of signage changes, and deliver long-term electricity savings;• acomprehensiveITinfrastructureupgrade for the benefit of centre visitors and staff; • anupgradeoftheBusinessManagement Service system to deliver greater efficiencies and co-operation between divisions;• theinstallationofsinglemodefibrefor enhanced multi-media streaming; and• theinclusionofelectroniclocksonall venues for enhanced client convenience and security.

enterprise developMent The CTICC places a priority on contributing to enterprise development in South Africa, particularly in the employment-creating Small-, Micro and Medium Enterprise (SMME) sector. Through long-term business partnerships with suppliers and service providers – many of whom have grown with the organisation since its inception – the CTICC affords SMMEs the opportunity to develop into profitable and sustainable businesses.

In line with this enterprise development commitment, BEE supply chain procurement practices form part of the CTICC’s key performance indicators and govern the centre’s efforts to drive the continued growth and development of its industry and all related businesses.

As at end-June 2011 58% of all CTICCprocurement spend was placed with BEEbusinesses and suppliers. Between July 2010 andJune 2011, 32 tenders to the value of R54 million were awarded to qualifying product and servicesuppliers by the CTICC.


iso CertiFiCationsIn early 2009 the CTICC became the first convention centre in Africa, and the second convention centre in the world, to obtain four management system certifications simultaneously in the form of:

• ISO9001–QualityManagement• ISO14001–EnvironmentalManagement• OHSAS18001–OccupationalHealth and Safety• HACCP(HazardAnalysisandCritical Control Points) – Food Safety

The certifications were achieved as a result of efforts to transform the CTICC’s work processes to international systems standards. Two years after the achievement of these ISOs, the standards they define remain key guidelines for the CTICC’s operational practices. Rather than being targets, however, these ISO certification requirements serve as minimum benchmarks and every effort is made to exceed them where possible.

partners and leadersDuring the past year the CTICC has focused on strengthening the valuable, collaborative relationships it enjoys with local, national and international partners and stakeholders.

The expansion project, in particular, has forged an even closer bond between the City of Cape Town and the Provincial Government of the Western Cape. The centre’s value-add offering to clients and delegates was strengthened through a collaboration with South African Airways to offer discounted flights to delegates attending conferences at the centre.

Much effort has gone into positioning the CTICC at the forefront of the national and international events and conferencing industries. Rashid Toefy continues to act as the Chairperson of the International Congress and Convention Association (ICCA) African Chapter and, during the year under review, successfully campaigned for

the first ICCA African Chapter workshop to be held outside of South Africa. The event was held in Kenya in August 2011. He also convened and moderated a workshop at the Global Association of the Exhibition Industry (UFI) Middle East/Africa Open Seminar in Sharjah early in 2011, which investigated opportunities for business development in Africa and the Middle East.

By ensuring that the CEO and executive managers are profiled through membership of local and international bodies and various speaking engagements, the centre’s intellectual capital is highlighted within the global meetings and events arena.

aChieving reCognition During the past year, the CTICC won the prestigious Meetings Professional International (MPI) Rise Award 2011 for organisational achievement, the African Access National Business Award, and the Most Memorable Event for 2010 award from the Exhibition Association of Southern Africa

(EXSA). The centre was also awarded third place in the Europcar Green Office 2010 competition and was a finalist in a number of other prestigious awards, including:

• The Global Association of the Exhibition Industry (UFI) ICT Awards

• The International Association of Congress Centre (AIPC) Innovation Award

• The South African Tourism Welcome Awards

• The Climate Change Award

• Exhibition News Best International Venue

In addition to being an opportunity to validatethe CTICC’s approach to delivering excellentexperiences for its clients and guests, enteringthese awards raises the profile of the centreand positions Cape Town as a venue and destination of choice.


ECoNomiC CoNTribUTioN of ThE CTiCC

2010/11 2009/10 2008/9 Cumulative

Contribution to national Gross Domestic Product (GDP)

R2.68 billion R2.3 billion R2.3 billion R16.8 billion

Contribution to Western Cape Gross Geographic Product (GGP)

R945 million R835.7 million R828 million R5.9 billion

Direct jobs created and maintained

3 422 3 076 3 242 –

Indirect jobs created and maintained

4 448 4 004 4 168 –

Visitor days (excl. induced tourism)

1 243 910 1 119 852 1 213 590 –

Foreign exchange earnings (net) R615 million R531.7 million R492.4 million R3.4 billion

In each of the macroeconomic contributions outlined above, delegate expenditure accounts for between 52% and 64% of the impact and induced tourism a further 30%.

the MaCroeConoMiC Contribution oF the CtiCCDuring the 2010/2011 financial period the CTICC contributed R2.68 billion to South African Gross Domestic Product (GDP) and R945 million to the Gross Geographic Product (GGP) of the Western Cape.

the CtiCC’s economic contribution at a glance

(Rand million, 2011 prices)

GDP GGP Direct WC jobs

Indirect SA jobs

Indirect taxes

Indirect h-hold

income

Net forex earnings

Delegate & visitor

days

CTICC capital expenditure

CTICC operational expenditure

Host/Organiser expenditure

Exhibitor expenditure

Delegate expenditure

50.1

59.3

65.8

2 04.4

1 475.2

14.9

39.2

13.9

69.4

547.0

65

70

36

112

2 189

83

91

109

291

2 557

5.4

11.7

7.1

19.6

130.5

27.3

29.1

35.8

102.7

747.0

Subtotal 1 854.9 6 84.4 2 471 3 131 174.3 942

Induced tourism 822.6 260.4 951 1 317 76.1 414

Total contribution 2011 2 677.5 944.8 3 422 4 448 250.4 1 355.9 615 1 243 910

Total contribution 2010 2 309.2 835.7 3 076 4 004 216.9 1 169.8 531.7 1 119 852

Macroeconomic contribution for the 2011 financial year

The contribution to GDP is expected to increase to R3.2 billion in the next financial year and then to R4.2 billion by 2016. The contribution to GGP is expected to increase to about R1.5 billion by 2016.

On a comparative basis, this means that the CTICC’s economic contribution to the national GDP increased by 16% (11.5% in real terms) year on year, while it added some 13% to its Western Cape GGP contribution over the same period.


Rather than merely coping with the economic fallout of the global economic crisis, the CTICC achieved new heights in terms of its contributions to both regional and national tourism and economic growth during the 2010/2011 financial year.


tourisM and visitor daysA large part of the economic contribution of the CTICC is attributed to visitor, delegate and tourist days. Some of these delegates and visitors return to Cape Town as occasional tourists and others may return on a regular basis.

At 1 243 910, the total number of tourism days generated by all events hosted at the CTICC increased by around 11% compared to 2010 and is the highest figure recorded by the centre since opening. The figure is largely attributable to higher visitor attendance at exhibitions and trade fairs and comprises 35% international delegates and visitors to the CTICC. The figures show that the decline in

visitor days experienced during the 2009/2010 financial year has been reversed and, during 2010/2011 the CTICC’s induced tourism contribution reverted to the steadily rising trend seen between 2004 and 2009. While the number of people attending congresses declined slightly from 2010, attendance of exhibitions and other events increased in 2011.

Based on advanced bookings and projections, the CTICC is expecting a significant increase in exhibitions, trade fairs and special events in 2012. It is anticipated that this will take the number of days attributed to exhibitions and other events to around 1 280 000 in the coming year.


Known

FY2006 FY2007 FY2008 FY2009 FY2010 FY2011

Congresses

Western CapeRest of South AfricaInternational

41 00564 20934 314

92 159145 07366 658

69 835109 99745 566

53 71284 43239 820

70 943111 38649 483

65 671103 09045 081

Total days 139 528 303 890 225 398 177 965 231 811 213 841

Exhibitions and other events

Western CapeRest of South AfricaInternational

248 276402 464400 591

221 693359 372357 700

222 161360 129358 454

244 567396 451394 606

209 715339 954338 372

243 255394 325392 490

Total days 1 051 330 938 765 940 744 1 035 625 888 041 1 030 070

Tota

l day

s ge

nera

ted

by a

ll ev

ents

FY2006 FY2007 FY2008 FY2009 FY2010 FY2011

1 400 000

1 200 000

1 000 000

800 000

600 000

400 000

200 000

0

Rest of South Africa Total

Western Cape International

total days generated by:

Contribution to provincial direct jobs – western Cape

The CTICC also remains a key contributor to indirect job creation across South Africa, with the total number of indirect jobs generated in 2011 being 4 448, which is also up from the 4 004 of 2010. This figure is projected to rise to over 5 300 by 2016.

Contribution to national indirect jobs – south africa

other economic contributions

• Foreignexchange One of the key macroeconomic benefits of the CTICC is that while it draws in visitors and creates jobs, it also makes an important contribution to foreign exchange earnings. In 2010/2011 the CTICC was a net generator of R615 million in foreign exchange earnings for the country.

• Taxrevenue It is estimated that R250 million in tax revenue was generated by the CTICC in 2011. This brings the cumulative contribution to tax revenue by the CTICC to R2.2 billion since 2003.

• Indirecthouseholdincome Over the 2010/2011 period the CTICC contributed R1.4 billion to indirect household income.

in ConClusionThe economic contribution of the CTICC remains significant. The steady increase in the number of visitor days it generates is particularly encouraging as this is a key indicator of its potential to continue adding such economic value in the future. The positive growth figures outlined in this section also support the planned expansion of the centre, and point to the likelihood that this will enable the CTICC to deliver even more economic and social benefits in the years to come.

about this economic impact study:In December 2000 prior to the building of the CTICC, Convenco commissioned the UCT

Graduate School of Business to conduct a study to determine the economic impact of the

convention centre. This annual study has been continued every year and the information on the

economic contribution of the CTICC is based on the ninth annual economic impact study as

conducted by the independent research organisation, Strategic Economic Solutions.

Job CreationThe CTICC continues to make a significant contribution to both direct and indirect job creation in the Western Cape. During the period under review the number of direct jobs sustained by the CTICC increased to 3 422 from the 3 076 of 2010. This figure is expected to continue increasing every year, with the total number of people directly employed due to the CTICC projected to reach 4 123 by 2016.

Financial year Known Projected

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016






Induced tourism

36

52

42

138

1 956

854

65

70

36

112

2 189

951

45

71

40

134

2 588

1 013

67

71

45

110

2 567

1 059

27

71

45

107

2 362

1 154

26

71

42

88

2 309

1 424

30

72

45

101

2 450

1 426

Total direct jobs 3 076 3 422 3 891 3 918 3 765 3 961 4 123

Financial year Known Projected

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016






Induced tourism

41

98

129

348

2 319

1 069

83

91

109

291

2 557

1 317

51

96

123

357

3 067

1 402

105

98

136

287

3 049

1 461

27

99

137

280

2 755

1 592

26

99

127

230

2 680

1 970

29

99

135

265

2 826

1 960

Total indirect jobs 4 004 4 448 5 095 5 137 4 891 5 131 5 315


The CTICC’s commitment to sustainability is entrenched in its operating model and embodied in its triple bottom line approach. This economic, environmental and social sustainability commitment is evidenced in the objectives that underpin the centre’s vision and is actively pursued across every area and operation of the business from facilities design, management and maintenance, to performance-driven economic contribution, employee development, social upliftment and even sustainable event offerings.

The sustainability of the CTICC is further reinforced through its membership of the United Nations Global Compact (UNGC). As the first convention centre in the world to achieve full membership status of the UNGC, the CTICC remains dedicated to the values and principles of the agreement and recommitted itself to these by renewing its membership in the year under review. The principles of the Global Compact inform the CTICC’s strategy, culture and day-to-day operations.

a Culture oF exCellenCeWhile the CTICC’s permanent staff component only numbers 96, at any given time the centre can be employing the services of hundreds of temporary staff. Regardless of their positions at the CTICC, or the duration of their employment, these staff members remain key to the success of the centre. The CTICC is therefore committed to continuously developing its people and ensuring that

SUSTaiNablE pErformaNCE

they enjoy every opportunity to make the most of their careers and contribute to the enhancement of the events and hospitality industries as a whole.

embracing diversityThe CTICC makes every effort to contribute to the transformation of the South African hospitality industry and follows stringent employment equity policies. As illustrated below, by end-June 2011 some 86% of the 96 staff members employed by the CTICC were from historically disadvantaged population groups.

offers educated, but unemployed individuals from local communities the opportunity to obtain skills and experience in the hospitality industry by working at the CTICC for a period of six months to one year. A specific focus area is the kitchen, where previously disadvantaged interns are received from institutions such as School of Skill, Jobstart, False Bay Khayelitsha Campus, Eziko Cooking School and Walter Sisulu University. During the year under review, a number of these interns were offered permanent employment at the CTICC, while many others went on to be employed elsewhere in the industry.

developing managersIn 2010, in partnership with the University of Cape Town’s Graduate School of Business, the CTICC developed and implemented a Postgraduate Diploma in Event Management. This honours level course is designed to equip hospitality and events managers with specific skills, thereby helping to raise the standard of the South African events management and conferencing sector. In 2011, in addition to registering all its own senior managers on this postgraduate course, the CTICC agreed to open it to the entire events and hospitality industry as part of the centre’s commitment to creating a highly robust and effective industry with vast depth of talent and knowledge. Already 24 ‘students’ from across the hospitality sector have registered for the next course, which began in August 2011.

rewarding performanceDuring the past year the CTICC developed and implemented a rewards and recognition

training and educationThe 2010/2011 financial year saw the continuation of the CTICC’s comprehensive talent management and skills development programme, which is aimed at furthering the knowledge, enhancing the skills and raising the employability of all its staff members.

A minimum of 5% of the CTICC’s annual budget is earmarked for staff education, training and development. During the 2010/2011 period a target of 9% was achieved. The benefits of this investment are reaping rewards with the quality of staff improving year on year and a steadily growing culture of learning and performance optimisation emerging throughout the organisation.

The specific training and education offerings of the CTICC include:

• opportunitiesforemployeestoattend short courses, and study towards relevant diplomas and degrees;• internalandon-the-jobtrainingin customer care and service, performance management and sustainability;• attendancebyselectstaffofnationaland international hospitality industry conferences; and• ajobrotationsystemandjobshadowing scheme that allows employees to gain experience in other positions within the organisation.

Creating futuresThe CTICC’s internship programme, which is run in collaboration with the City of Cape Town,

staff demographics by race

Coloured Indian

WhiteAfrican

7%

55%

24%

14%

of the staff are from historically disadvantaged population groups


the CTICC’s energy efficiency initiatives during the period under review include:

• continuousmaintenanceand improvement of all electrical fittings and equipment to enhance efficiencies and reduce energy consumption. This includes the retrofitting of light bulbs with energy-efficient alternatives; • thefittingofvariablespeeddriveson HVAC pumps and fan motor to enable control over settings and associated electricity usage during periods of lower occupancy;• settinglightingto50%withonly ventilation instead of air-conditioning during build-up and strike periods, thereby reducing the overall energy consumption of events and conferences; • proximitysensorsonallescalatorstolimit unnecessary electrical draw-off as a result of these devices running when they are not being used; and• theuseofremotecontrolledblindsto promote the use of natural light wherever possible.

Year on year, the CTICC has shown constant improvement in, and reduction of, electricity consumption as efficiency measures have been implemented and refined.

water efficiencyWater consumption has been significantly reduced through the installation and use of dual flush systems on all toilets in the centre. The upgrade to the centre’s public restrooms includes waterless urinals and the retro-fitting of taps with proximity sensors. Dishes are washed using two high-capacity, highly efficient conveyor-driven dishwashers, which saves time, energy and water.

Indoor landscaping utilises indigenous and water-wise plants, which are watered by means of a drip irrigation system. The CTICC also takes responsibility for the maintenance and irrigation of the City of Cape Town islands and traffic circle outside the venue.

nurturing our worldThe CTICC’s environmental sustainability efforts are not only aimed at limiting any negative impact its operations may have on the environment, the centre is also committed to actively contributing to the conservation and preservation of its natural heritage. Environmental sustainability efforts are therefore guided by a comprehensive environmental management policy and executed via a range of sustainable initiatives. These are supported by determined and ongoing efforts to embed a green consciousness as a mind-set across the organisation and influence clients, suppliers and all stakeholders to make their own contributions towards environmental sustainability.

The CTICC’s business strategy places a priority on progressively and innovatively implementing best practice environmental sustainable initiatives particularly (but not exclusively) in terms of:

energy and climate change The centre’s policy is to firstly find ways to reduce its energy requirements and then to consider alternative energy sources. Some of

The percentage of paper and board waste that gets recycled

total recycled waste: 99 613 kg(Over the period under review)

Plastics – 13 078 kg

Glass – 25 425 kg

Paper and board – 55 584 kg

Metals – 5 527 kg

55.8%25.5%

13.1%

5.6%

policy, which includes an annual staff rewards programme aimed at recognising the outstanding performance of individual employees based on various performance criteria. The programme includes an Employee of the Month Award, a Manager of the Year Award and a CEO’s Award for the most outstanding staff member over the course of the year.

These awards have proven popular and highly effective in terms of their ability to motivate and incentivise staff to exceed their personal performance targets and deliver consistently excellent service in the course of their daily duties.

waste minimisationWaste is sorted on site before collection for recovery and recycling purposes. Waste is generally separated at source to reduce contamination. During the period under review a total of 391 366 kg of waste was generated at the CTICC, 291 639 kg of which was sent to landfill, while 99 613 kg was recycled (25%). The type and amount (measured by weight in kg) is indicated in the table below.

building capacityThe CTICC has adopted the Thomas Personal Profiling Analysis recruitment methodology, which analyses human behaviour across various internal and external dimensions in order to ensure the best possible employee fit and alignment of personal and organisational cultures and values. The approach, which is also known as DiSC (Dominance, Influence, Steadiness, Conscientiousness) profiling, is used in over 60 countries and has proven effective in providing a more structured candidate interview process.


55.8%

Contributing to soCietyApart from its continued contribution to economic and employment development in South Africa, the CTICC remains committed to uplifting and empowering individuals and communities within Cape Town and the Western Cape.

A big part of this commitment is providing staff, clients and guests with as many opportunities as possible to become involved in helping those less fortunate than themselves. During the 2010/2011 period, initiatives in this regard included:

the ‘bring back your bag’ initiativeEvent organisers were encouraged to prompt delegates to donate unwanted congress bags, pens, note pads and lanyards for distribution to schools in Cape Town’s disadvantaged communities.


eco-procurementTo encourage effective resource management and reduce waste the CTICC supports eco-procurement principles. By engaging with suppliers, and through service-level agreements, the CTICC is able to request locally-sourced goods and services, which supports the local economy and reduces food miles and the associated energy usage. When procuring new equipment, energy efficiency is an important characteristic and appropriate specifications are incorporated in tender requests.

taking now into tomorrowIn 2008 the CTICC established an environmental task team – the Nurture our World (NOW) team – that is made up of representatives of each of the divisions of the organisation, as well as key partner service providers, in order to focus on achievements and progress.

The NOW initiative has met with immensely positive response from all stakeholders and the past year saw the CTICC investigating ways in which to advance the programme and extend its environmental benefits. Through the NOW initiative the CTICC ultimately aims to achieve and maintain excellence in environmental responsibility in all facets of its business. For this reason NOW has been extended to include NOW supplier accreditation, which is aimed at encouraging suppliers of the CTICC to align themselves with the centre’s sustainability objectives.

Year-on-year comparison (total kWh per month as illustrated in the graph above) shows constant improvement in and reduction of electricity consumption as efficiency measures have been implemented and refined.

Energy consumption: 2005 to mid-2011

Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

1 400 000

1 300 000

1 200 000

1 100 000

1 000 000

900 000

800 000

700 000

600 000

kWh-2005 kWh-2006 kWh-2007 kWh-2008 kWh-2010kWh-2009 kWh-2011

Food redistributionThe CTICC donated all excess food from functions it hosted during the year to a registered non-profit organisation that delivers food to 66 beneficiary organisations. On a daily basis each of these charities feeds an average of 120 people, many of whom are vulnerable children in care homes and pre-school facilities, as well as terminally ill patients, the disabled and the elderly.

ExpaNdiNG oUr horizoNSSince inception, the core mandate of the CTICC has been to contribute to economic growth and job creation, through attracting international meetings and events to Cape Town. In the eight years since it opened its doors, the centre has consistently realised this objective and demonstrated what can be achieved through the power of partnership between public and private enterprises.

However, changing global markets and client demands require that the CTICC responds dynamically if it is to remain at the cutting edge of the international events industry and move up the rankings towards achieving its vision of being the world’s leading long-haul convention centre.

After many years of planning and discussion, this response to growing global demand will now come in the form of a significant expansion of the CTICC over the next five years and the creation of an innovative and attractive convention precinct on the Cape Town foreshore which, it is envisaged, will include convention, exhibition, office, retail, entertainment and medical facilities. The new development will not only expand CTICC facilities but will also create a new development node linking it with Artscape and the Civic Centre, making it more accessible to the city’s integrated transport system.

the expansion iMperativeApart from the need to respond to growing global demand for top-quality convention and exhibition space, the expansion of the CTICC will bring many benefits to the city, some of which are:

• fargreatereconomicspin-off;• jobcreationandindirectfinancialbenefits for residents;• agreatershareofinternational conventions on African shores;• profilingandpositioningofCapeTownas a preferred business tourism destination;• increasedsupportformanyother commercial activities and industries;• alargeincreaseininducedtourism;• increasedhoteloccupancy;• anextendedtourismseasonforthecity;and• increasedrevenueandreturnon investment for shareholders.

Charity support The CTICC directly supports a number of charities that have been nominated by its staff members. Apart from contributing food, finances and equipment to these charities, the centre encourages its staff members to support these and other charitable organisations via volunteerism or personal financial contributions. While such involvement is not compulsory, it can have

a positive impact on the achievement of individual KPIs, thereby ensuring better overall performance scores for employees.

Full details of the CTICC’s environmental, social and economic sustainability efforts and initiatives over the past financial year are contained in the 2011 CTICC Sustainability Report, which is available at www.cticc.co.za


lookiNG forwardAs businesses and communication continue to become increasingly electronic, the role of the convention centre is steadily evolving. Conferences, trade shows and events are fast becoming the only physical contact that many businesses and brands have with their customers, partners and other stakeholders.

This places a massive responsibility on the shoulders of the world’s convention centres to be more than just venues, but facilitators of relationship building. Trade shows, events and conferences are now the community integrators of the world. They are the means by which people come into physical contact with one another, share knowledge, discuss issues and build tangible social networks.

This role as the primary space for live interaction is not one to be taken lightly. Not least because it is creating a highly competitive environment in which convention centres across the globe need to vie for their share of a potentially lucrative, but always challenging market.

If the CTICC is to compete successfully in this environment, it is imperative that our business model is dynamic, our people are knowledgeable and passionate, and our facilities are the best in the world.

More importantly, it is vital that our centre moves beyond mere service excellence to experience creation.

Unlike many other convention centres around the world, the CTICC does not believe the appropriate response to the competitive events environment is to offer low-cost or free convention space. It is our sincere belief that the vast majority of clients and their guests place far greater value on a brilliant experience than they do on a cheap, but ultimately forgettable, one.

In line with this belief, our response to the changing meeting needs of the business world will be to stick to our vision of becoming the best long-haul international convention centre in the world. We will achieve this by giving our clients and their guests the kind of experience that they are more than willing to pay for.

Yes we will be innovative and flexible in our approach – adjusting prices according to demand and occupancy periods – but ultimately, our commitment to capitalising on the experience economy lies at the heart of our growth and success strategy.

Our focus, in the coming years, will therefore be on building stronger, more personal relationships – with our clients, guests, communities, suppliers and stakeholders. We will strive to ensure that every experience of the CTICC is always authentic, emotive and highly memorable for all the right reasons.


Meeting growing deMandAt present the CTICC boasts high venue occupancy levels of around 60% on average. During high-demand conference months, such as September, October and November, the centre operates at almost a 100% capacity. Internationally these occupancies are regarded as very high and the current occupancy level, especially of the exhibition halls, has now become a threat to the development of potential new business. The expansion will allow the CTICC to mitigate this risk and accommodate the increasing number of

global event planners that seek venues that allow them to add an exhibition component to their annual meetings and conferences.

driving Cape town’s eConoMiC developMent The City of Cape Town has identified the hosting of events as a key component of its economic development strategy. The expansion of the centre will serve to drive this strategy, ensuring that Cape Town competes successfully in the global meetings and events market, and achieves its vision of being the best long-haul international convention centre.

1. Convention Tower 2 on Heerengracht opposite existing tower

2. Expansion of exhibition space

3. Hospital area

4 & 5. Artscape/Founders Garden Precinct

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GovErNaNCE, CompliaNCE aNd riSk maNaGEmENTgovernanCe CoMMitMentThe Convenco board subscribes to the best practice principles set out in the King Report on Corporate Governance for South Africa 2009 (King III). During the past financial year, the board has identified and set in motion the required protocols to ensure the adoption and implementation of the new governance standards. It places strong emphasis on maintaining high standards of financial management, accounting and reporting to ensure that the company’s affairs are managed in an ethical, transparent and responsible manner, while also taking into consideration appropriate risk parameters.

board struCture and responsibilitiesThe company is governed by an experienced and stable board of directors, which directs, governs and is in effective control of its business. The board is ultimately responsible for determining the strategic direction of the company through the establishment of strategic objectives and policies.

The company has a unitary board structure, which currently comprises twelve non-executive directors and two executive directors being the Chief Executive Officer and Chief Operating Officer. Mr Joey Pather, the Chief Operating Officer, was appointed to the Board on 26 August 2011. The roles of Chairperson and Chief Executive Officer are separated.

There are currently three vacancies on the board. Board meetings are held at least quarterly to review the company’s performance against set targets and more frequently if necessary. Board meetings are scheduled well in advance and board

members are provided with all relevant information and agendas to enable them to make informed decisions. A record is kept of each director’s attendance at board meetings. The directors may seek professional advice on matters concerning the affairs of the company.

Changes to the boardMr David Jack resigned as a board member on 5 May 2011 and Mr Joey Pather was appointed as a board member on 26 August 2011.

board CoMMitteesThe Convenco board committees operate in accordance with terms of reference defined in their respective charters. Regular reports on the committees’ activities are provided to the board. The members of the committees are listed on page 93.

audit committeeThe audit committee reviews the adequacy and effectiveness of: the financial reporting processes; accounting practices; management information systems; the system of internal controls; the management of financial, investment and operational risks; the internal and external audit processes; and compliance with laws and regulations. The committee makes submissions to the board regarding accounting policies, financial control, records and reporting.

As the company does not have a separate risk committee, the audit committee also oversees the risk management process and monitors the implementation of the CTICC’s risk management plan, which is reviewed by the board quarterly and approved annually.

44 | 2011 Annual Report 2011 Annual Report | 45

company’s activities, having regard to relevant legislation, other legal requirements and/or prevailing codes of best practice, with regard to matters relating to: social and economic development; good corporate citizenship; the environment, health and public safety, including the impact of the company’s activities, products or services; consumer relationships, including the company’s advertising, public relations and compliance with consumer protection laws and labour and employment; to draw matters within its mandate to the attention of the board as and when necessary and to report, through one of its members, to the shareholders at the company’s annual general meeting on the matters within its mandate. The committee will also be tasked with monitoring the ethical conduct of the company, its executives and senior officials.

CoMpany seCretaryThe company secretary ensures that, in accordance with pertinent laws, the proceedings and affairs of the directorate and, where appropriate, members of the company, are properly administered. The directors have access to the secretary and can seek the advice of the secretary on board and governance matters. The company secretary also acts as secretary to all committees of the board.

internal ControlThe directors are responsible for ensuring that the company has internal control systems in place aimed at providing reasonable assurances regarding the safeguarding of assets and the prevention of their unauthorised use or disposal. They are also responsible for ensuring the maintenance of proper accounting records and the reliability of financial and operational information utilised in the business.

For the period under review, nothing has come to the attention of the directors or external auditors to indicate any material breakdown in the functioning of controls, procedures or systems.

risk ManageMentThe board is responsible for the governance of risk in the organisation (including information technology governance) and is committed to complying with the risk management requirements set out in King III. To this end, a risk identification and management process has been put in place. Management is responsible for the implementation of the risk management plan and for providing assurance to the board in this regard. The severity of risks is measured, and appropriate risk mitigating interventions are prioritised accordingly.

sustainabilityThe board is committed to the sustainability of the organisation and has put in place the relevant procedures to enable the company to meet its commitments to its various stakeholders in an ethical, socially responsible, and environmentally friendly manner.

The board has affirmed its ongoing commitment to procurement from black economically empowered companies and to the development of intellectual and human capital within the company with a particular focus on historically disadvantaged individuals.


The committee meets at least quarterly. Both the internal and external auditors have access to the committee and are invited to attend audit committee meetings.

remuneration committeeThe remuneration committee comprises four directors and meets at least once a year for the purpose of reviewing annual salary increases, bonus incentives and the company’s remuneration strategy.

nominations committeeThe nominations committee consists of three non-executive directors and is tasked with overseeing and making recommendations to the board to ensure that:

• theboardhastheappropriatecomposition to execute its duties effectively; • directorsareappointedthroughaformal and transparent process;

• ongoinginduction,training,development and evaluation of directors takes place; and• formalsuccessionplansfortheboard, Chief Executive Officer and senior management positions are in place.

expansion committeeThe expansion committee has been mandated by the board to oversee all aspects of the CTICC’s planned expansion. The committee comprises the chairperson of the board, two non-executive directors and the Chief Executive Officer. It meets monthly or more frequently if necessary.

social and ethics committeeThe company is in the process of constituting a social and ethics committee. It will comprise three non-executive directors and the Chief Executive Officer. The committee will fulfil a role previously fulfilled by the audit committee and the Board as a whole. It will monitor the


Of all CTICC procurementspend was placed with BEE businesses and suppliers

Operating profit for the year

R33.2milThe increase in contribution to national GDP

16.2%

The reports and statements set out below comprise the annual financial statements presented to members:

Contents

Report from the Auditor-General 51Report of the directors 54Statement of financial position 56Statement of financial performance 57Statement of changes in net assets 58Cash flow statement 59Notes to the financial statements 60

The following supplementary schedules do not form part of the financial statements and are unaudited.

Detailed income statement 93

Directorate and administration 95

Approval of the annual financial statements

The financial statements which appear on pages 56 – 92 were approved by the boardof directors on 26 August 2011 and are signed on their behalf by:

Director21 September 2011



ANNUAL FINANCIAL STATEMENTSfor the year ended 30 June 2011

REPORT FROM ThE AUDITOR-GENERALReport of the auditor-general to the provincial parliament and council on the financial statements of cape town international convention centre company (pty) ltd


RepoRt on the finAnCiAl stAtements

introduction

1. I have audited the accompanying financial statements of the Cape Town International Convention Centre Company (Pty) Ltd (the CTICC) which comprise the appropriation statement, the statement of financial position as at 30 June 2011, and the statement of financial performance, statement of changes in net assets and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information as set out on pages 56 to 92.

Accounting officer’s responsibility for the financial statements

2. The accounting officer is responsible for the preparation of these financial statements in accordance with Statements of Generally Recognised Accounting Practice (Standards of GRAP) and in the manner required by the Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of 2003) (MFMA) and the Companies Act of South Africa, 2008 (Act No. 71 of 2008) and for such internal control as management determines necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor-General’s responsibility

3. As required by section 188 of the Constitution of the Republic of South Africa, 1996 read with section 4 of the Public Audit Act, 2004 (Act No. 25 of 2004) (PAA), my responsibility is to express an opinion on these financial statements based on my audit.

4. I conducted my audit in accordance with International Standards on Auditing and General Notice 1111 of 2010 issued in Government Gazette 33872 of 15 December 2010. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

5. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in


order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

6. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

opinion

7. In my opinion the annual financial statements present fairly, in all material respects, the financial position of the Cape Town International Convention Centre Company (Pty) Ltd as at 30 June 2011, and its financial performance and its cash flows for the year then ended, in accordance with Generally Recognised Accounting Practice and in the manner required by the MFMA and the Companies Act.

emphasis of matter

8. I draw attention to the matters below. My opinion is not modified in respect of these matters:

Restatement of corresponding figures

9. As disclosed in note 23 to the financial statements the corresponding figures for property, plant and equipment for 30 June 2011 have been restated by R1 584 092 as a result of the reassessment of useful lives in the current year.

material impairments

10. As per note 2 to the financial statements, assets with a cost of R16 091 344 were impaired in the current year as the recoverable amount was less than the carrying value. The cost relate to the expansion project to increase the capacity of the convention centre.

Additional matters

11. I draw attention to the matter below. My opinion is not modified in respect of this matter:

Unaudited supplementary schedules

12. The supplementary information set out on pages 93 to 94 does not form part of the financial statements and is presented as additional information. I have not audited these schedules and accordingly I do not express an opinion thereon.

RepoRt on otheR leGAl AnD ReGUlAtoRY ReQUiRements

13. In accordance with the PAA and in terms of General Notice 1111 of 2010, issued in Government Gazette 33872 of 15 December 2010, I include below my findings on the annual performance report as set out on pages 16 to 40 and material non-compliance with laws and regulations applicable to the municipal entity.

predetermined objectives

14. There are no material findings on the annual performance report.

Compliance with laws and regulations

Procurement and contract management

15. Goods and services with a transaction value of over R200 000 were not procured by means of a competitive bidding process as per the requirements of the Municipal Supply Chain Management Regulations, section 19.

inteRnAl ContRol

16. In accordance with the PAA and in terms of General notice 1111 of 2010, issued in Government Gazette 33872 of 15 December 2010, I considered internal control relevant to my audit, but not for the purpose of expressing an opinion on the effectiveness of internal control. The matters reported below are limited to the significant deficiencies that resulted in the findings on compliance with laws and regulations included in this report.

leadership

17. The procurement and contract management audit established that the Supply Chain Management (SCM) requirements outlined in paragraph 15 should have been complied with. This oversight resulted in the reported non-compliance. The accounting officer decided to dispense with a competitive bidding process based on advice received and with the approval of the Board of Directors. It is further noted that the municipal entity should improve the SCM skills within the organisation to avoid future instances of non-compliance.

otheR RepoRts

investigations

18. Three investigations were performed relating to three separate instances of fraud. The outcome of the investigations has led to the dismissal or resignation of employees implicated in the fraudulent activities.

Cape Town

14 September 2011

REPORT OF ThE DIRECTORSfor year the ended 30 June 2011

1. General reviewThe company’s business and operations and the results thereof are clearly reflected in the attached financial statements.

2. statements of responsibilityThe directors have responsibility for the maintenance of adequate accounting records and the preparation, integrity and fair presentation of the financial statements of the Cape Town International Convention Centre Company (Pty) Ltd. The financial statements have been prepared in accordance with the Standards of Generally Recognised Accounting Practice (GRAP) including any interpretations of such Statements issued by the Accounting Practices Board. The financial statements are based on appropriate accounting policies, consistently applied.

The directors are also responsible for the company’s systems of internal financial control. These control procedures are designed to provide reasonable, but not absolute, assurance about the reliability of the financial statements, that assets are safeguarded and to prevent and detect losses. The directors are not aware of any significant breakdown in the functioning of these measures, procedures and systems during the year under review.

The going concern basis has been adopted in preparing the financial statements. The directors have no reason to believe that the company will not be a going concern in the foreseeable future, based on forecasts and available cash and finance resources.

The financial statements have been audited by the Auditor-General of South Africa, who was given unrestricted access to all financial records and related data, including minutes of all meetings of shareholders, the board of directors and committees of the board. The directors are of the opinion that all representations made to the independent auditors during the audit are valid and appropriate.

3. DividendsNo dividends were declared or recommended during the year.

4. share capitalThere were no changes in the authorised and issued share capital of the company during the period under review.

5. events subsequent to year-endNegotiations on the potential expansion of the convention centre have taken place after year-end.

6. DirectorsThe directors of the company during the year under review and at the date of this report were:

R Toefy (CEO)AM Boraine (Chairman)DC SkeateSA Fisher (Dr)DS Jack (Resigned – 5 May 2011)TM PasiweLF Platzky (Dr)S MontsiMA GierdienAC Seymour (CA(SA))HJ TaljaardBN Roberts

The directors have pleasure in presenting their report for the year ended 30 June 2011. This report forms part of the audited financial statements.

7. AuditorsThe Auditor-General of South Africa was reappointed as auditor in terms of the Municipal Finance Management Act, 2003 (Act No. 56 of 2003) (MFMA).

8. holding companyThe company is controlled by the City of Cape Town, which owns 50.3% of the company’s shares. The remaining shares are held by the Provincial Government of the Western Cape (25.1%) and SunWest International (Pty) Ltd (24.7%).

9. subsidiaryThe company has only one subsidiary, the Cape Town International Convention Centre Operating Company (Pty) Ltd (OPCO). OPCO is in the process of being deregistered


STATEMENT OF FINANCIAL POSITIONas at 30 June 2011

2011 2010

Notes R R

Assets

non-current assets 180 416 732 182 290 433

Property, plant and equipment 2 180 416 632 182 290 333

Investment in subsidiary 3 100 100

Current assets 145 092 653 134 717 386

Inventories 5 1 384 850 2 478 677

Trade and other receivables 6 9 283 260 8 084 327

Cash and cash equivalents 13.2 134 424 543 124 154 382

Total assets 325 509 385 317 007 819

net Assets AnD liABilities

net assets 266 171 000 268 497 590

Contribution from owners 7 565 639 701 565 639 701

Accumulated deficit (299 468 701) (297 142 111)

non-current liabilities

Deferred taxation 4 8 317 610 9 240 059

Current liabilities 51 020 775 39 270 170

Client deposits 11 202 798 13 432 946

Trade and other payables 8 36 811 995 20 326 215

Provisions 9 2 467 728 2 319 813

Receiver of revenue 538 254 3 191 196

Total net assets and liabilities 325 509 385 317 007 819

STATEMENT OF FINANCIAL PERFORMANCEfor the year ended 30 June 2011

2011 2010

Notes R R

Revenue 143 297 502 137 944 628

Cost of sales (19 590 390) (16 194 229)

Gross profit 123 707 112 121 750 399

Other operating income 11 865 355 13 594 174

Finance income 11 7 660 146 8 843 567

Other 4 205 209 4 750 607

Operating expenses (131 412 263) (115 648 207)

Operating profit 10 4 160 204 19 696 366

Finance costs 11 (61 176) (6 459)

Profit before taxation 4 099 028 19 689 907

Taxation 12 (6 425 618) (5 545 748)

Net (loss)/profit for the year (2 326 590) 14 144 159


STATEMENT OF ChANGES IN NET ASSETSfor the year ended 30 June 2011

Issued capital

Share premium

Contributions from owners

Accumulated deficit

Total

R R R R R

Balance at 1 July 2009 566 565 639 135 565 639 701 (310 252 052) 255 387 649

Prior year error (1 034 218) (1 034 218)

Profit for the year — — — 14 144 159 14 144 159

Balance at 30 June 2010 566 565 639 135 565 639 701 (297 142 111) 268 497 590

Loss for the year — — — (2 326 590) (2 326 590)

Balance at 30 June 2011 566 565 639 135 565 639 701 (299 468 701) 266 171 000

CASh FLOW STATEMENTfor the year ended 30 June 2011

2011 2010

Notes R R

Cash flow from operating activities 37 616 930 18 541 733

Cash receipts from customers 145 574 157 138 599 827

Cash paid to suppliers and employees (97 895 042) (113 127 344)

Cash generated from operations 13.1 47 679 115 25 472 483

Finance costs 11 (61 176) (6 459)

Taxation paid (10 001 009) (6 924 291)

Cash flow from investing activities (27 346 769) (3 522 217)

Acquisition of property, plant and equipment

(35 332 081) (12 365 784)

Proceeds on disposal of property, plant and equipment

325 166 —

Finance income 11 7 660 146 8 843 567

Cash flow from financing activities

Loans repaid — —

Decrease in share capital — —

Increase/(decrease) in cash and cash equivalents

10 270 161 15 019 516

Cash and cash equivalents at the beginning of the year

13.2 124 154 382 109 134 866

Cash and cash equivalents at the end of the year 13.2 134 424 543 124 154 382


NOTES TO ThE FINANCIAL STATEMENTSfor the year ended 30 June 2011

1. Accounting policies

1.1 Basis of preparationThe financial statements have been prepared in accordance with the Standards of Generally Recognised

Accounting Practice (GRAP) prescribed by the Minister of Finance in terms of Notices 991 and 992 in Government Gazette No. 28095 and Notice 516 in Government Gazette No. 31021.

In the process of applying the accounting policies, management has made the following significant accounting judgements, estimates and assumptions, which have the most significant effect on the amounts recognised in the financial statements:

standards and interpretations issued, but not yet effectiveThe entity has not applied the following standards and interpretations, which have been published and are mandatory for the entity’s accounting periods beginning on or after 01 April 2012 or later periods:

GRAp 23: Revenue from non-exchange transactionsThe objective of GRAP 23 is to prescribe requirements for the financial reporting of revenue arising from non-exchange transactions, other than non-exchange transactions that give rise to an entity combination. The Standard deals with issues that need to be considered in recognising and measuring revenue from non-exchange transactions, including the identification of contributions from owners.

Revenue from non-exchange transactions arises when an entity receives value from another entity without directly giving approximately equal value in exchange.

Revenue from non-exchange transactions are accounted for using the ‘assets and liabilities’ approach rather

than using an ‘earnings’ approach which is followed for exchange revenue.

An entity is required to determine and recognise the fair value of goods received inkind. An entity is only required to determine and disclose the fair values of services received in-kind.

It is unlikely that the standard will have a material impact on the entity’s annual financial statements.

GRAp 24: presentation of budget information in annual financial statementsThis standard requires a comparison of budget amounts and the actual amounts arising from execution of the budget to be included in the financial statements of entities that are required to, or elect to, make publicly available their approved budget(s) and for which they are, therefore, held publicly accountable. The standard also requires disclosure of an explanation of the reasons for material differences between the budget and actual amounts. Compliance with the requirements of this standard will ensure that entities discharge their accountability obligations and enhance the transparency of their financial statements by demonstrating compliance with the approved budget(s) for which they are held publicly accountable and, where the budget(s) and the financial statements are prepared on the same basis, their financial performance in achieving the budgeted results.


GRAP 1 Presentation of Financial Statements

GRAP 2 Cash Flow Statements

GRAP 3 Accounting Policies, Changes in Accounting Estimates and Errors

GRAP 4 The Effects of Changes in Foreign Exchange Rates

GRAP 5 Borrowing Costs

GRAP 6 Consolidated and Separate Financial Statements

GRAP 7 Investment in Associates

GRAP 8 Investment in Joint Ventures

GRAP 9 Revenue from Exchange Transactions

GRAP 10 Financial Reporting in Hyperinflationary Economies

GRAP 11 Construction Contracts

GRAP 12 Inventories

GRAP 13 Leases

GRAP 14 Events after the Reporting Date

GRAP 16 Inventory Property

GRAP 17 Property, Plant and Equipment

GRAP 19 Provisions, Contingent Liabilities and Contingent Assets

GRAP 20 Related Party Disclosure

GRAP 100 Non-current Asset Held for Sale and Discontinued Operations

GRAP 101 Agriculture

GRAP 102 Intangible Assets

GRAP 104 Financial Instruments

Accounting policies for material transactions, events or conditions not covered by the above GRAP standards have been developed in accordance with Paragraphs 7, 11 and 12 of GRAP 3. Where a standard of GRAP that has been issued by the Accounting Standards Board exists, but for which an effective

date has not yet been determined by the Minister of Finance, accounting policies were developed based on the relevant GRAP standard.

The significant accounting policies are set out above and are consistent with those applied in the previous financial year.

2011%

Fixtures and equipment 8.33 – 33.33

Motor vehicles 16.67 – 25.00

Furniture and fittings 8.33 – 20.00

Kitchen and catering equipment

11.11 – 50.00

Office equipment 10.00 – 50.00

Computer equipment 33.33

Computer software 33.33 – 50.00

Escalators and elevators 5.56 – 10.00

Carpets and laminated flooring

12.50 – 16.67

Curtains and blinds 10.00 – 20.00

Signage 8.33 – 33.33

Audiovisual equipment 7.69 – 16.67

Fences and gates 6.67 – 20.00

Cold rooms 5.88 – 8.33

Air-conditioning equipment

5.56 – 20.00

Sprinkler system 16.67 – 20.00

Auditorium seating 8.33 – 16.67

Building management system

5.88 – 16.67

Building 3.00 – 16.67

Entities are appropriated resources through the annual budget process. These resources are granted to entities by Parliament, the legislatures or municipal councils so that entities can execute their mandate. Budgets effectively provide entities with the authority to incur expenditure in order to fulfil the various programmes operated by government. It is often necessary to revise the original budgets during the year for a number of reasons. Entities themselves are also allowed to make certain amendments within the budgetary limits set by Parliament, the various legislatures or municipal councils.

It is important for financial reporting purposes that users of the financial statements understand the link between the budget and financial statements, hold entities accountable for their actual activities against what was planned, and how allocated resources were utilised. Entities that make their budgets publicly available are thus required to present a comparison between:

• thebudgetandactualamounts;• betweenthelastbudgetapprovedby Parliament, the legislatures or municipal councils, and the final budget (which includes those changes made by management within the prescribedlimits);and• includeanexplanationofthematerial differences between the budget and actual amounts in the notes to the financial statements (unless these explanations are included in another

document published at the same time as the financial statements).

Where an entity prepares its budget and financial statements on a comparable basis, it includes the comparison as an additional column in the primary financial statements. Where the budget and financial statements are not prepared on a comparable basis, a separate statement is prepared, called the ‘Statement of Comparison of Budget and Actual Amounts’. This statement compares the budget amounts with the amounts in the financial statements adjusted to be comparable to the budget.

A comparable basis means that the budget and financial statements:

• arepreparedusingthesamebasisof accountingi.e.eithercashoraccrual;• includethesameactivities andentities;• usethesameclassificationsystem;and• arepreparedforthesameperiod.

Entities must disclose on what basis the budget is prepared, including information about the accounting and classification basis, the period of the approved budget, and the entities it covers.

Entities should prepare and disclose a reconciliation between the actual amounts presented on a comparable basis and the actual amounts presented in the financial statements. It is unlikely that the amendment will have a material impact on the entity’s annual financial statements.

impairment of trade receivablesThe calculation in respect of the impairment of debtors is based on an assessment of the extent to which debtors have defaulted on payments already due, and an assessment of their ability to make payments based on their creditworthiness. This was performed per service-identifiable categories across all classes of debtors.

property, plant and equipmentThe useful lives of assets are based on management’s estimation. Management considers the impact of technology, availability of capital funding, service requirements and required return on assets to determine the optimum useful life expectation where appropriate. The estimation of residual values of assets is also based on management’s judgement whether the assets will be sold or used to the end of their useful lives, and what their condition will be at that time.

provisions and contingent liabilitiesManagement’s judgement is required when recognising and measuring provisions, and when measuring contingent liabilities. Provisions are discounted where the effect of discounting is material using actual valuations.

1.2 property, plant and equipmentAll property, plant and equipment are stated at cost less accumulated depreciation.

Depreciation is calculated on the straight-line method to write off the cost of each asset to its residual value over its estimated useful life as follows:


1. Accounting policies (continued)

1.2 property, plant and equipment (continued)

The assets’ estimated useful lives and residual value is reviewed on an annual basis.

Repairs and maintenance are generally charged to expenses during the financial period in which they are incurred. However, major renovations are capitalised and included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to the company. Major renovations are depreciated over the remaining useful life of the related asset.

Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are included in operating profit.

Where the carrying value of an asset exceeds the calculated recoverable amount, the asset is immediately written down.

1.3 impairment of assetsNon-current assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount, which is the higher of an asset’s net

selling price and value in use. For the purpose of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows.

1.4 leasesLeases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the income statement on a straight- line basis over the period of the lease.

1.5 inventoriesInventories are stated at the lower of cost or net realisable value. Cost is determined on the weighted average method and includes transport and handling costs. The weighted average price is determined using a weighted average price for the month based on the most recent month’s purchases. Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses.

1.6 Deferred taxationDeferred taxation assets and liabilities are determined, using the liability method, for all temporary differences arising between the tax base of assets and liabilities and their carrying value for financial reporting purposes. Currently enacted tax rates are used in the determination of deferred income tax. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised.

1.7 provisionsProvisions are recognised when the company has a present legal or constructive obligation as a result of past events when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and when a reliable estimate of the amount of the obligation can be made.

1.8 Revenue recognitionRevenue comprises the invoiced value of sales of goods and services net of value added tax, rebates and all discounts. Revenue from the sale of goods are recognised when the significant risks and rewards of ownership of the goods have been transferred to the buyer.

Revenue arising from the rendering of services is recognised when the event takes place.

1.9 financial instrumentsThe company classifies financial assets in the following categories: at fair value through profit or loss, loans and receivables, and available for sale. The classification depends on the purpose for which the financial assets are acquired. Management determines the classification of its financial assets at initial recognition.

financial assets at fair value through profit and loss

Financial assets at fair value through profit and loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling

in the short term. Derivatives are classified as held for trading unless they are designated as hedges. Assets in this category are classified as current assets.

loans and receivablesLoans and receivables are non-derivative financial assets with fixed and determinable payments that are not quoted in an active market. They are included in current assets except for maturities greater than 12 months after the reporting date. These are classified as non-current assets. Loans and receivables are classified as trade and other receivables in the statement of financial position.

Available-for-sale financial assetsAvailable-for-sale financial assets

are non-derivatives that are either

designated in the category or

not classified in any of the other

categories. They are included in

the non-current assets unless

management intends to dispose of the

investment within 12 months of the

reporting date.

Regular purchases and sales of financial

assets are not recognised on the

trade date on which the company

commits to purchase or sell the assets.

Investments are initially recognised at a

fair value plus transaction costs for all

financial assets not carried at fair value

through profit and loss. Financial assets

carried at fair value through profit and

loss are initially recognised at fair value,

and transaction costs are expensed in

the income statement.


1. Accounting policies (continued)

1.9 financial instruments (continued)

Available-for-sale financial assets (continued)

Financial assets are derecognised

when the right to receive cash

flows from the investments have

expired or have been transferred

and the company has transferred

substantially all risks and rewards

of ownership. Available-for-sale

financial assets at fair value through

profit and loss are subsequently

carried at fair value. Loans and

receivables are carried at amortised

cost using effective interest rates.

Gains or losses arising from changes

in the fair value of the ‘financial assets

at fair value through profit and loss’

category are presented in the income

statement within ‘other (losses)/gains –

net’ in the period in which they arise.

Dividend income from financial assets

at fair value through profit and loss is

recognised in the income statement

as part of other income when the

company’s right to receive payment is

established.

Changes in the fair value of the

monetary securities denominated

in a foreign currency and classified

as available for sale are analysed

between translation differences

resulting from trading changes in

amortised cost of the security and

other changes in the carrying amount

of the security. The translation

differences on the monetary securities

arerecognisedinprofitandloss;

translation differences on non-

monetary securities are recognised

in equity. Changes in the fair value

of the monetary and non-monetary

securities are classified as available for

sale and are recognised in equity.

When securities classified as available

for sale are impaired the accumulated

fair value adjustments recognised in

equity are included in the income

statement as gains and losses from

investment securities. Interest on

available-for-sale securities calculated

using the effective interest rate

method is recognised in the income

statement as part of ‘other income’.

Dividends on available-for-sale equity

instruments are recognised in the

income statement as part of other

income when the company’s right to

receive the payments is established.

The fair values of the quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted shares), the company establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analyses and option pricing models, making maximum use of the market inputs and relying as little as possible on entity-specific inputs.

The company assesses at each reporting date whether there is objective evidence that a financial asset is impaired. In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of the security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss, measured as the difference between the acquisition cost and the current fair value less any impairment loss on those financial assets previously recognised in the profit and loss, is removed from equity and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments are not reversed through the income statement.

1.9.1 trade receivablesTrade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the group will be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered

indicators that the trade receivable is impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the income statement within selling and marketing costs. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recovery of amounts previously written off is credited against selling and marketing costs in the income statement.

1.9.2 Cash and cash equivalentsCash and cash equivalents include

cash on hand, deposits held at

call with banks, other short-term

highly liquid investments with

original maturities of three months

or less, and bank overdrafts.

Bank overdrafts are shown within

borrowing in current liabilities on

the statement of financial position.

share capitalOrdinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.


1. Accounting policies (continued) 1.9 financial instruments (continued)

1.9.2 Cash and cash equivalents (continued)

Where any company purchases the company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes), is deducted from equity attributable to the company’s equity holders until the shares are cancelled or reissued.

1.9.3 trade payablesTrade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method.

1.9.3.1 Financial risk factorsThe company’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects

on the company’s financial performance. The company uses derivative financial instruments to hedge certain risk exposures.

i) Interest rate riskThe company’s income and operating cash flows are substantially independent of changes in market interest rates.

ii) Credit riskConcentrations of credit risk with respect to trade receivables are limited due to the company’s large number of customers, who are both internationally and nationally dispersed.

The company has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. The company has policies that limit the amount of credit exposure to any one financial institution, and cash transactions are limited to creditworthy institutions.

iii) Liquidity riskPrudent liquidity risk management implies maintaining sufficient

cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions.

iv) Capital risk managementThe company’s objectives when managing capital are to safeguard the company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

1.9.3.2 Fair value estimationIn assessing the fair value of financial instruments, the company uses a variety of methods and makes assumptions that are based on market conditions existing at

each reporting date. The fair value of financial assets and liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate available to the company for similar financial instruments.


1. Accounting policies (continued) 1.10 translation of foreign currencies

transactionsForeign currency transactions are recorded on initial recognition in Rands, by applying to the foreign currency amount the exchange rate between the Rand and the foreign currency at the date of the transaction.

At each reporting date:(a) foreign currency monetary items are reported using the closing rate;and(b) non-monetary items, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.

Exchange differences arising on the settlement of monetary items or on reporting an enterprise’s monetary items at rates different from those at which they are initially recorded during the period, or reported in previous financial statements, are recognised as income or expenses in the period in which they arise.

1.11 employee benefitsThe company operates a defined contribution plan. A defined contribution plan is a pension plan where the company pays fixed contributions into a separate entity. The company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay

all employees the benefits relating to employee service in the current and prior periods. The company has no payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due.

1.12 Unauthorised expenditureUnauthorised expenditure is expenditure that has not been budgeted, expenditure that is not in terms of the conditions of an allocation received from another sphere of government, municipality or organ of State and expenditure in the form of a grant that is not permitted in terms of the Municipal Finance Management Act, 2003 (Act No. 56 of 2003). Unauthorised expenditure is accounted for as an expense in the statement of financial performance and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.

1.13 irregular expenditureIrregular expenditure is expenditure that is contrary to the Municipal Finance Management Act, 2003 (Act No. 56 of 2003), the Municipal Systems Act, 2000 (Act No. 32 of 2000), and the Public Office-bearers Act, 1998 (Act No. 20 of 1998) or is in contravention of the municipality’s supply chain management policy. Irregular expenditure excludes unauthorised expenditure. Irregular expenditure is accounted for as expenditure in the statement of financial performance and where recovered, it is subsequently

accounted for as revenue in the statement of financial performance.

1.14 fruitless and wasteful expenditureFruitless and wasteful expenditure is expenditure that was made in vain and would have been avoided had reasonable care been exercised. Fruitless and wasteful expenditure is accounted for as expenditure in the statement of financial performance and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.

1.15 Comparative informationComparative figures are reclassified or restated as necessary to afford a proper and more meaningful comparison of results, as set out in the affected notes to the financial statements. Budgeted amounts have been included in the annual financial statements for the current financial year only.

1.16 Critical accounting estimates and judgements

The company makes estimates and assumptions concerning the future. The resulting accounting estimate will, by definition, seldom equal the related actual results. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have significant risk

of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

1.16.1 Asset useful lives and

residual valuesPlant and equipment is depreciated over its useful life taking into account residual values where appropriate. The actual useful lives of the assets and residual values are assessed annually and vary depending on the number of factors. In reassessing asset useful lives, factors such as technological innovation and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.


NOTES TO ThE FINANCIAL STATEMENTSfor the year ended 30 June 2011

2. property, plant and equipment

2011

Cost Accumulated depreciation and

impairment

Carrying value

R R R

Escalators 3 417 720 919 067 2 498 653

Elevators 9 967 151 5 670 201 4 296 950

Carpets/Laminated flooring 6 799 612 4 671 112 2 128 500

Curtains/Blinds 2 742 081 1 554 071 1 188 010

Signage 5 172 815 2 804 614 2 368 201

Audiovisual 12 160 136 8 766 409 3 393 727

Fences and gates 1 094 650 521 275 573 375

Cold rooms 2 572 402 1 385 234 1 187 168

Air-conditioning system 33 209 052 14 495 000 18 714 052

Sprinkler system 4 861 226 4 689 430 171 796

Auditorium seating 5 053 452 3 374 820 1 678 632

Building management system 29 920 550 21 435 253 8 485 297

Building 442 900 220 339 170 469 103 729 751

Plant and equipment 7 361 808 5 535 528 1 826 280

Motor vehicles 1 129 453 1 018 218 111 235

Furniture and fittings 12 705 862 8 609 541 4 096 321

Kitchen and catering 17 049 951 12 443 226 4 606 725

Office equipment 4 187 775 2 500 209 1 687 566

Computer equipment 11 094 217 7 546 423 3 547 794

Computer software 2 327 574 1 821 881 505 693

Assets in progress* 29 712 250 16 091 344 13 620 906

645 439 957 465 023 325 180 416 632

2010

Cost Accumulated depreciation

Carrying value

R R R

Escalators 3 417 720 640 796 2 776 924

Elevators 9 967 151 4 961 426 5 005 725

Carpets/Laminated flooring 6 043 961 4 497 924 1 546 037

Curtains/Blinds 1 450 499 1 428 148 22 351

Signage 2 904 185 1 979 098 925 087

Audiovisual 12 004 933 7 577 230 4 427 703

Fences and gates 947 923 355 387 592 536

Cold rooms 2 572 402 1 212 079 1 360 323

Air-conditioning system 32 974 894 12 704 288 20 270 606

Sprinkler system 4 821 657 4 654 677 166 980

Auditorium seating 4 983 346 2 880 676 2 102 670

Building management system 25 446 465 19 012 041 6 434 424

Building 435 851 330 333 725 096 102 126 234

Plant and equipment 8 754 768 6 194 052 2 560 716

Motor vehicles 1 487 008 1 174 769 312 239

Furniture and fittings 13 740 636 9 087 636 4 653 000

Kitchen and catering 18 294 649 13 070 738 5 223 911

Office equipment 4 095 862 2 385 355 1 710 507

Computer equipment 8 524 448 5 603 015 2 921 433

Computer software 2 024 919 1 375 749 649 170

Assets in progress* 16 501 757 — 16 501 757

616 810 513 434 520 180 182 290 333

* Assets in progress relate to the capitalised costs incurred on the expansion of the convention centre. * Assets in progress relate to the capitalised costs incurred on the expansion of the convention centre.


2. property, plant and equipment (continued)

2011 Carrying value at beginning

of year

Re-classification

Additions Disposals Depreciation and

impairment

Carrying value at end of year

R R R R R

Escalators 2 776 924 — — 278 271 2 498 653

Elevators 5 005 725 — — 708 775 4 296 950

Carpets/Laminated flooring

1 546 037 24 692 1 513 990 41 667 914 552 2 128 500

Curtains/Blinds 22 351 219 897 1 221 862 — 276 100 1 188 010

Signage 925 087 682 885 1 303 785 — 543 556 2 368 201

Audiovisual 4 427 703 477 148 992 — 1 183 445 3 393 727

Fences and gates 592 536 15 716 95 388 — 130 265 573 375

Cold rooms 1 360 323 — — 173 155 1 187 168

Air-conditioning system

20 270 606 — 404 158 99 237 1 861 475 18 714 052

Sprinkler system 166 980 39 570 — 34 754 171 796

Auditorium seating 2 102 670 9 727 — — 433 765 1 678 632


6 434 424 15 282 4 358 767 — 2 323 176 8 485 297

Building 102 126 234 560 345 5 819 526 13 293 4 763 061 103 729 751

Plant and equipment

2 560 716 (912 903) 858 455 3 534 676 454 1 826 280

Motor vehicles 312 239 — — 173 811 27 193 111 235

Furniture and fittings

4 653 000 (52 515) 1 046 045 — 1 550 209 4 096 321

Kitchen and catering

5 223 911 (478 706) 2 033 825 27 487 2 144 818 4 606 725

Office equipment 1 710 507 (280 625) 688 161 7 967 422 510 1 687 566

Computer equipment

2 921 433 195 728 2 286 409 96 057 1 759 719 3 547 794

Computer software 649 170 — 302 655 — 446 132 505 693

Assets in progress* 16 501 757 13 210 493 — 16 091 344 13 620 906

182 290 333 — 35 332 081 463 053 36 742 729 180 416 632

The carrying amounts of property, plant and equipment can be reconciled as follows:

2010 Carrying value at beginning

of year

Re-classification

Additions Disposals Depreciation Carrying value at end of year

R R R R R

Escalators 938 449 2 240 748 356 045 46 228 2 776 924

Elevators 5 714 500 — — 708 775 5 005 725

Carpets/Laminated flooring

2 071 995 267 911 — 793 869 1 546 037

Curtains/Blinds 18 396 7 755 — 3 800 22 351

Signage 1 134 011 109 303 — 318 227 925 087

Audiovisual 5 658 953 — — 1 231 250 4 427 703

Fences and gates 613 317 86 826 — 107 607 592 536

Cold rooms 1 533 477 — — 173 154 1 360 323

Air-conditioning system

22 027 013 69 058 — 1 825 465 20 270 606

Sprinkler system 75 110 114 856 — 22 986 166 980

Auditorium seating 2 526 709 — — 424 039 2 102 670


9 195 290 — — 2 760 866 6 434 424

Building 104 515 809 1 833 166 — 4 222 741 102 126 234

Plant and equipment

3 366 088 151 081 — 956 453 2 560 716

Motor vehicles 432 586 58 406 — 178 753 312 239

Furniture and fittings

4 422 150 1 746 097 — 1 515 247 4 653 000

Kitchen and catering

6 267 490 1 452 355 — 2 495 934 5 223 911

Office equipment 1 580 090 756 278 — 625 861 1 710 507

Computer equipment

1 742 612 2 377 154 — 1 198 333 2 921 433

Computer software 428 990 414 446 — 194 266 649 170

Assets in progress* 15 821 413 680 344 — — 16 501 757

190 084 448 12 365 784 356 045 19 803 854 182 290 333


* Assets in progress relate to the capitalised costs incurred on the expansion of the convention centre. * Assets in progress relate to the capitalised costs incurred on the expansion of the convention centre.

2. property, plant and equipment (continued)

Gross carrying amount (fully depreciated property, plant and equipment):

2011 2010

R R

Audiovisual 358 652 —

Auditorium seating 70 106 —

Building 381 932 —

Building management system 8 519 840 —

Carpets 34 003 —

Curtains/Blinds 587 053 1 423 034

Fences & gates 24 830 —

Signage 1 083 194 —

Sprinkler system 4 626 326 4 626 326

Vehicles 934 684 367 884

Computer software 1 221 496 1 043 421

Computer equipment 3 474 269 3 115 571

Office equipment 1 168 743 21 332

Furniture & fittings 352 769 1 673 695

Artwork 1 321 095 1 321 095

Plant & equipment 451 447 289 731

Kitchen & catering 8 439 860 2 595 068

33 050 299 16 477 157

impairment considerationIn line with our accounting policy for property, plant and equipment and GRAP for the impairment of assets, non-current assets were assessed during the period for possible indicators of impairment.

During the review management has confirmed the following:

* Assets in progressAssets with a cost R16 091 344 were impaired in the current year as the recoverable amount was less than carrying value. This was mainly due to the fact that the initial Customs House expansion project was assessed as unlikely to continue and most of the cost incurred was irrecoverable and could not be used on the new expansion project.

Building(a) The main purpose of establishing the centre was to generate spin-off returns for the region.

(b) Due to the restrictions imposed on the use of the facility and site, no active market exists within which the value of the centre can be determined through an arm’s length transaction between a willing buyer and a willing seller, and as such the value in use of the centre has been used to determine whether the building’s carrying value may not be recoverable.

(c) Since inception, all initial targets for the region (spin-offs) and the operation of the convention centre have consistently been exceeded and is forecast to maintain this level of performance for the foreseeable future.

(d) Despite this, the value in use of the centre can only be attributed to the present value of the future cash flows generated within the centre itself, and excludes any value which it generates for other entities or business sectors.

(e) No value could be attached to the centre at the end of its useful life due to its disposal being highly unlikely and no reliable basis for measuring the disposal value existing.

(f) A discount rate of 11% (2010:13%) was used which was calculated using the risk-free rate R207 of 8.4% adjusted by 2.6% for uncertainty regarding timing and extent of certain of the cash flows.

Based on this valuation method, a value almost equal to current carrying value of R102 869 253 was established for the building at date of valuation, which has resulted in a nil reversal of impairment. The carrying amount at cost before impairment reversal is R392 660 158 (2010: R358 910 365).


2011 2010

R R

3. investment in subsidiary

The company has an investment in the following company:

Unlisted

Cape Town International Convention Centre Operating Company (Pty) Ltd (OPCO)

100 100

The results of the subsidiary company is reflected in these financial statements, however the agency agreement between Cape Town International Convention Centre Company (Pty) Ltd (Convenco) and Cape Town International Convention Centre Operating Company (Pty) Ltd (OPCO) terminated on 30 June 2010. OPCO does not reflect any trading activities in its financial results and will be deregistered.

4. Deferred taxation

Deferred income taxes are calculated on all temporary differences under the balance sheet liability method using a tax rate of 28%.

the deferred tax liability is made up as follows:

At the beginning of the year 9 240 059 11 049 624

Prior period error adjustments — (402 196)

Correction of deferred tax asset for previous year — (41 350)

Tax rate adjustment — —

Utilisation of previously recognised deferred tax asset — —

Temporary differences (922 449) (1 366 019)

At the end of the year 8 317 610 9 240 059

the balance comprises:

Capital allowance (non-deductible temporary differences) 8 317 610 9 240 059

8 317 610 9 240 059

5. inventories

Food 699 264 1 448 295

Beverage 539 033 874 200

Consumables 128 650 134 560

Chemicals 17 903 21 622

1 384 850 2 478 677

2011 2010

R R

6. trade and other receivables

Trade receivables 6 072 556 8 349 211

Less: provision for impairment of trade receivables (602 782) (3 561 688)

Trade receivables – net 5 469 774 4 787 523

Prepayments 903 766 889 019

Receiver of revenue: VAT — 1 882 550

Other receivables 2 909 720 525 235

9 283 260 8 084 327

trade receivables ageing

Current (0 – 30 days) 2 149 973 7 921

31 – 60 days (42 958) 3 767 531

61 – 90 days (32 154) 59 306

91 – 120 days 604 118 1 717 944

+ 120 days 3 393 577 2 796 509

Total 6 072 556 8 349 211

Trade receivables past and impaired 602 782 3 561 688

Trade receivables past due 5 469 774 4 787 523

The carrying amount of trade and other receivables approximates their fair value due to their short-term maturity.

Trade receivables in 120 days are not impaired as there is no history of default from these clients.

The carrying value of these trade receivables is denominated in the following currency: South African Rand.

provision for impairment of trade receivables

Opening balance 3 561 688 703 036

Additional provision 602 782 3 561 688

Unused amounts reversed (3 561 688) (703 036)

Closing balance 602 782 3 561 688

The other classes within trade and other receivables do not contain impaired assets.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivables mentioned above. The company does not hold any collateral as security.


2011 2010

R R

7. Contribution from owners

Authorised

300 ordinary shares of R1 each 300 300

56 000 A ordinary of 1cent each 560 560

14 000 B ordinary shares of 1cent each 140 140

issued

42 599 A ordinary shares of 1cent each 426 426

14 000 B ordinary shares of 1cent each 140 140

Share premium 565 639 135 565 639 135

565 639 701 565 639 701

8. trade and other payables

Trade payables 18 506 968 9 747 947

Accruals 17 568 789 10 493 468

Receiver of revenue: VAT 449 450 —

Sundry payables 286 788 84 800

36 811 995 20 326 215

The carrying amount of trade and other payables approximates their fair value due to short-term maturity.

The carrying value of these trade payables is denominated in the following currency: South African Rand

18 506 968 9 747 947

9. provisions

Performance bonus provision

Opening balance 2 319 813 2 300 419

Additional provisions 2 467 728 2 319 813

Prior year provision utilised (2 319 813) (2 300 419)

Closing balance 2 467 728 2 319 813

Performance bonuses accrue to staff on an annual basis based on the achievement of predetermined performance. The provision is an estimate of the amount due to staff in the service of the company at reporting date.

2011 2010

R R

10. operating profit/(deficit)

Operating profit is stated after:

Income

Profit/(Loss) on foreign exchange 32 186 (160 334)

Rental income

Vexicure (Pty) Ltd t/a Westin Grand 2 148 450 2 756 607

Expenditure

Auditors' remuneration – Audit fee 637 503 517 155

Provision for impairment of trade receivables 299 062 3 065 283

Directors' remuneration

Non-executive directors' remuneration 236 589 226 295

CEO – basic salary 1 167 024 1 012 514

– bonus 147 203 101 251

Key management renumeration

COO – basic salary 1 197 696 1 021 842

– bonus 159 692 178 724

Operations – basic salary 823 704 715 248

– bonus 109 181 106 536

Commercial – basic salary 801 882 715 248

– bonus 109 181 106 536

Finance – basic salary 904 236 817 134

– bonus 145 082 111 384

Human resources – basic salary 595 452 529 302

– bonus 80 866 78 765

Depreciation

– Property, plant and equipment 20 651 385 19 803 854

Impairment

– Property, plant and equipment 16 091 344 —

Management fees – Amsterdam RAI (refer to note 16) 972 994 9 305 510

Repairs and maintenance on property, plant and equipment 7 621 363 7 185 481

Revenue

Commissions 8 514 574 8 479 759

Parking 8 058 787 7 821 359

Sales 123 765 064 120 195 171

Subcontractor service income 42 083 315 29 984 236

Subcontractor service expense (39 124 238) (28 535 897)

143 297 502 137 944 628


2011 2010

R R

11. finance income and costs

Finance income

– cash and cash equivalents 7 660 146 8 843 567

Finance cost

– Finance costs – South African Revenue Service (61 176) (6 459)

Net finance income 7 598 970 8 837 108

12. taxation

South African normal taxation

Current year 7 348 067 8 245 224

Underprovision prior year — 41 118

Tax credit on prior years' assessments made by South African Revenue Service

— (1 333 226)

Prior year error – deferred tax — (41 350)

Deferred taxation (refer note 4) (922 449) (1 366 018)

Taxation 6 425 618 5 545 748


Tax calculated at 28% 1 147 728 5 513 174

Underprovision prior year — 41 118

Deferred tax asset recognised (922 449) (1 366 019)

Expenses not deductible for tax purposes 6 200 340 1 357 475

6 425 618 5 545 748

13.1 Cash generated from/(utilised in) operations


Adjustment for:

Depreciation 20 651 385 19 803 854

Impairment 16 091 344 —

Finance income (7 660 146) (8 843 567)

Asset write-off 169 076 356 045

Finance costs 61 176 6 459

Profit on disposal of property, plant and equipment (31 189) —

Increase in provision for bonuses 147 915 19 394

Increase in provision for impairment of trade receivables (2 958 906) (2 858 652)

30 569 683 28 173 440

2011 2010

R R

13.1 Cash generated from/(utilised in) operations (continued)

Movements in working capital

Decrease/(Increase) in inventories 1 093 827 (1 418 739)

(Increase)/Decrease in receivables 1 759 973 5 818 626

Increase/(Decrease) in payables 14 255 632 (7 100 844)

47 679 115 25 472 483

13.2 Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and balance with banks. Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts:

Current accounts 13 479 026 6 628 992

Call and investment accounts 120 857 570 117 457 091

Petty cash 5 500 5 500

Cash float 64 800 62 800

Cash on hand 17 647 —

Cash and cash equivalents 134 424 543 124 154 383

The following bank and investment accounts were held by the entity:

Nedbank Current Account (Acc Number: 1232043850) 5 957 860 1 570 083

Nedbank Call Account (Acc Number: 03/78815440.77/46) 3 551 155 3 058 087

Nedbank Investment Account (Acc Number: 78811544007/75) 11 462 915 10 819 955

Standard Bank Investment Account (Acc Number: 407144) — 5 733 282

Standard Bank – 32 Deposit (Acc Number: 407819) — 16 622 633

Investec Bank (Acc Number: 40002681309) — 12 007 421

Investec Bank (Acc Number: 8485/000) — 17 125 362

ABSA Bank Current (Acc Number: 4072900553) 4 271 501 1 754 247

ABSA Bank – Hotel Serv – Current (Acc Number: 4072900228) 424 819 985 824

ABSA Bank – Exh Serv – Current (Acc Number: 4072900731) 1 098 109 792 545

Stanlib – Bank (Acc Number: 000402184) — 20 460 709

ABSA Bank Treasury (Acc Number: 4073731246) 52 214 1 476 706

ABSA Bank Treasury (Acc Number : 4073733701) 1 674 523 49 588

Nedbank Deposit CT (Acc Number: 03/7232511442/018) — 75 383

Nedbank – Three-month Deposit (Acc Number: 03/7232511442/033) — 11 699 367

Nedbank Current Account (Acc Number: 1232015385) — 161 992


2011 2010

R R

13.2 Cash and cash equivalents (continued)

The following bank and investment accounts were held by the entity (continued):

Absa Bank – Call Deposit (Acc Number: 4074708347) 9 764 093 4 467 776

Absa Bank – Fixed Deposit (Acc Number: 2070519504) 11 000 744 15 225 123

Stanlib – Bank (Acc Number: 551436367) 5 336 872 —

Standard Bank Investment Account (Acc Number: 433189) 18 237 722 —

Standard Bank Investment Account (Acc Number: 432621) 15 604 883 —

Absa Bank – Investment New 2 (Acc Number: 2070549024) 17 637 329 —

Absa Bank – Investment New 1 (Acc Number: 2070535742) 15 853 974 —

Nedbank – Three-month Deposit (Acc Number: 7232511442/73) 12 407 884 —

14. expenses by nature

Depreciation 20 651 385 19 803 854

Employee-related costs (note 17) 30 640 127 27 643 062

Changes in inventories (1 093 827) (1 418 739)

Raw materials and consumables used 18 496 563 17 612 698

Advertising cost 3 154 419 2 896 831

Other expenses 79 215 162 65 310 889

Total cost of sales and operating expenses 151 063 829 131 848 595

15. Related parties

City of Cape town

The City of Cape Town is the controlling shareholder of Convenco. The City of Cape Town has leased the land, on which the convention centre is built, to the company for a period of 99 years at a cost of R100 per annum.

In terms of an agreement dated April 2001, Convenco has sub-leased a portion of land to Vexicure (Pty) Ltd t/a Westin Grand for an initial period of 30 years extendable to 50 years. The hotel erected on this site reverts to the City of Cape Town should the lease not be renewed.

2011 2010

R R

Related party transactions

Rates and taxes 5 569 502 3 393 724

Electricity 7 225 910 5 859 807

Water 847 587 534 938

Lease P1 Parking (including refuse, sewerage, rates and water) 2 354 124 2 006 389

Key management remuneration 4 322 970 3 798 774

Related party balances

Amounts owing to City of Cape Town 2 765 631 447 943

16. management contract

Convenco has outsourced the management of its convention centre operating division previously to Amsterdam RAI which had terminated on 30 June 2010. RAI Amsterdam currently provides the services of international management and marketing support.

Fixed management fees 972 994 2 642 299

Basic management fees — 694 824

Incentive fee — 5 968 387

972 994 9 305 510

17. employee-related costs

Salaries and wages 23 777 152 21 578 735

Contributions for UIF, WCA, medical aid, etc 1 548 410 1 380 164

Provident fund 1 764 364 1 612 418

Overtime 483 928 320 245

Performance bonus 1 879 405 1 684 745

Other: staff transport and health and safety costs 1 186 868 1 066 755

Total employee-related costs 30 640 127 27 643 062


2011 2010

R R

18. irregular and fruitless and wasteful expenditure

Opening balance 1 397 708 132 333

Fruitless and wasteful expenditure current year – penalties — 1 229

– interest expense — 6 459

Irregular expenditure – misappropriation of funds 730 688 —

Irregular expenditure – supply chain regulations 9 961 975 1 390 020

Reported to parent municipality (1 397 708) (132 333)

Closing balance 10 692 663 1 397 708

2011 2011Actual Budget

R R

20. Actual versus budget (revenue and expenditure for the year ended 30 June 2011)

Revenue 143 297 502 132 288 004

other income 4 137 087 2 632 948

less direct costs: (30 499 984) (26 118 719)

Cost of sales (19 424 745) (16 177 099)

Direct personnel (8 244 970) (6 810 664)

Parking costs (2 354 124) (2 458 080)

Equipment hire (476 145) (672 876)

Add: finance income 7 660 146 8 417 881

less: indirect expenditure (120 495 723) (109 824 741)

Personnel costs (32 759 683) (31 681 311)

Operations – general (1 846 508) (2 029 396)

Utility services (13 378 745) (15 256 536)

Maintenance (7 368 052) (7 466 901)

Building costs (9 899 101) (10 048 103)

Office costs (4 018 938) (4 080 627)

Computer expenses (3 358 337) (3 193 488)

Advisers (2 765 729) (2 963 076)

Travel and entertainment (1 398 931) (2 003 984)

Marketing and corporate communications (3 314 195) (4 595 827)

Catering materials (2 311 543) (2 183 828)

Bad debts (299 062) (241 776)

Management fees (note 17) (972 994) (1 561 000)

Impairment (16 091 344) —

Depreciation (20 651 385) (22 518 888)

Finance costs (61 176) —

net profit for the period 4 099 028 7 195 373

incident Disciplinary steps/criminal proceedings/Resolution

Theft of cash and misappropriation of funds

Matter was reported to South African Police Service and R321 708 was recovered from the employees and they have resigned.

321 708 —

Fraudulent supplier payment

Matter was reported to South African Police Service and still under investigation (A claim has been submitted to the insurers).

408 980 —

South African Revenue Service

Late payment interest paid to South African Revenue Services for income tax/VAT/PAYE

— 7 688

Irregular expenditure in a few instances occurred due to the nature and industry of our business which did not allow us to adhere to the supply chain regulations

9 961 975 1 390 020

10 692 663 1 397 708

19. operating leases

The company has entered into operating lease agreements on premises utilised. Lease agreements on these premises have been entered into for a period ranging from two years to 99 years. Rental comprises minimum monthly payments.

Future commitments under the operating leases are summarised as follows:

1 year 2 – 5 years 5 years+

2011

Future minimum lease payments (ZAR) 2 367 334 9 384 683 489 498 135

2010

Future minimum lease payments (ZAR) 2 184 032 9 173 868 492 076 292


21. financial instruments

21.1 Risk management

foreign exchange riskThe company operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar, Euro and UK pound. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities, and net investments in foreign operations.

market riskThe company’s activities expose it primarily to risks of fluctuations in interest rates.

interest rate riskThe company’s interest rate profile consists of fixed and floating rate bank balances which expose the company to fair value interest rate risk and cash flow interest.

interest rate sensitivity riskThe sensitivity analysis below has been determined based on the financial instruments’ exposure to interest rates at reporting date.

A sensitivity analysis shows reasonable expected change in the interest rate, either an increase or decrease in the interest rate percentage. The equal but opposite 1% adjustment to the interest rate would result in an equal but opposite effect on surplus and therefore has not been disclosed separately.

2011 2010

Increase/Decrease in interest rates 1% 1%

Net surplus (post-tax) R967 857 R893 911

foreign currency risk managementManagement accepts the risk as a result of changes in the rate of exchange and therefore has not hedged foreign currency risk.

The only foreign currency risk that the entity is exposed to is the management fee due to RAI outstanding at year-end which is included in trade and other payables.

The company is exposed to the currency mentioned below in the table. The table details the company’s sensitivity to the below-mentioned percentage strengthening and weakening in the functional currency against the relevant foreign currencies. This percentage is the sensitivity rate and represents management’s assessment of the reasonable possible change in foreign exchange rates.

The sensitivity analysis includes only outstanding Rand-denominated management fees at year-end of R299 919 (29 750 Euros) (2010: R5 968 387 (624 216 Euros)).

2011 2010

Percentage weakening/strengthening in functional currency 5% 5%

Effect on surplus (post-tax) R10 797 R214 861

Credit risk managementCredit risks refer to the risk that the counterparty will default on its contractual obligation resulting in financial loss to the company. The company has adopted a policy of only dealing with creditworthy parties.

Financial assets, which potentially subject the entity to credit risk, consist principally of cash and cash equivalent and trade and other receivables.

The company’s cash and cash equivalents are placed with high credit quality financial institutions.

Credit risk with respect to trade receivables is limited due to the credit approval processes.

Credit quality of trade receivables. The following represents the credit quality of the trade receivables:

2011 2010

R R

Key accounts customers 4 983 127 4 079 494

Other accounts customers 486 647 708 029

High-risk customers 602 782 3 561 688

6 072 556 8 349 211

The company believes that no further impairment is necessary on trade receivables.

liquidity riskLiquidity risk is the risk that the company will not be able to meet its financial obligations as they become due. The company ensures that adequate funds are available to meet its expected and unexpected financial commitments.

The following table provides details of the company’s remaining contractual liability for its financial liabilities.

less than 1 month

Between 1 and 3 months

R R

2011

Client deposits 11 202 798 —

Trade and other payables 14 197 385 22 614 610

25 400 183 22 614 610

2010

Client deposits 13 432 946 —


20 927 607 12 831 554


21. financial instruments (continued)

21.1 Risk management (continued)

Capital risk managementThe company’s objectives when managing capital are to safeguard the company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

Consistent with others in the industry, the company monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt dividend by total capital. Net debt is calculated as total borrowings (including borrowings, and trade and other payables, as shown in the statement of financial position) less cash and cash equivalents. Total capital is calculated as equity, shown in the statement of financial position, plus net debt.

The gearing ratios at 30 June 2011 and at 30 June 2010 were as follows:

22. supply chain management regulations

22.1 DeviationsIn terms of section 36 of the Municipal Supply Chain Management (SCM) Regulations, any deviation from the Supply Chain Management Policy has been approved.

2011

Total deviations for the year amounted to R20 900 513

Listed below are the deviations:

incident R

Emergency situations 12 750

Single provider 1 496 760

Exceptional cases where it is impossible/impractical to follow official procurement processes

18 966 525

Strip quote 424 478

20 900 513

According to section 36 of the SCM Regulations and the CTICC SCM policy we may deviate from the regulations and policy:

1 Emergency situation

2 Single provider

3 Acquisition of specialised artwork/heritage assets

4 Acquisition of zoo animals

5 Where it is impossible to follow official procurement processes


2011 2010

R R


Less: Cash and cash equivalents (134 424 543) (124 154 382)

Net cash 97 612 548 103 828 167

Total equity 168 558 452 164 669 423

Total capital 266 171 000 268 497 590

Gearing ratio 37% 39%

21.2 financial instruments by categoryThe accounting policies for financial instruments have been applied below:

2011 loans and receivables

Assets as per financial position R

Trade and other receivables 8 379 494

Cash and cash equivalents 134 424 543

other financial liabilities

liabilities per financial position R

Trade and other payables 36 811 995

Client deposits 11 202 798

2010 loans and receivables

Assets as per financial position R

Trade and other receivables 5 312 758

Cash and cash equivalents 124 154 382

other financial liabilities

liabilities per financial position R

Trade and other payables 20 326 215

Client deposits 13 432 946

23. prior year restatementDuring the 2010/2011 financial year, a prior year restatement occurred with GRAP 17 being effective. As in terms of the company’s accounting policy, the estimated useful lives of the assets had to be reassessed, due to certain assets on the asset register being componentised. The changes in the evaluated useful lives of the components have thus resulted in a restatement of prior year figures.

Reported in prior year

Restatement Reported after restatement

R R R

Reconciliation of equity

1 July 2009

Accumulated deficit (310 252 052) (1 034 218) (311 286 270)

30 June 2010

Property, plant and equipment 183 874 425 (1 584 092) 182 290 333

Deferred tax 9 683 605 (443 546) 9 240 059

Accumulated deficit (296 001 563) (1 140 546) (297 142 109)

Reconciliation of profit for the year

30 June 2010

Depreciation 19 656 174 147 680 19 803 854


2010

Total deviations for the year amounted to R42 935 572

Listed below are the deviations:

incident R

Emergency situations 243 871

Single provider 5 873 603

Acquisition of specialised artwork/heritage assets 11 825

Exceptional cases where it is impossible/impractical to follow official procurement processes:

Hotel services (impractical) (as per client’s request) 25 201 954

Impractical to source quotes 7 389 906

Deviations as a result of tenders pending (Impractical) 693 239

Client request 122 676

Other exceptional cases 3 398 498

42 935 572

22. supply chain management regulations (continued)

22.1 Deviations (continued)

DETAILED INCOME STATEMENT for the year ended 30 June 2011

2011 2010

R R

Gross revenue 143 297 502 137 944 628

Commissions 8 514 574 8 479 759

Parking 8 058 787 7 821 359

Sales 123 765 064 120 195 171

Subcontractor service income 42 083 315 29 984 236

Subcontractor service expense (39 124 238) (28 535 897)

Cost of sales (19 590 390) (16 194 229)

Opening stock 2 478 677 1 059 938

Purchases 18 496 563 17 612 968

Closing stock (1 384 850) (2 478 677)

Gross profit 123 707 112 121 750 399

other income 11 865 355 13 594 174

Finance income 7 660 146 8 843 567

Profit on sale of property, plant and equipment 31 189 —

Profit on foreign exchange 32 186

Proceeds received from insurance 4 747 306 712

Sundry income 4 137 087 4 443 895

total income 135 572 467 135 344 573

expenditure (refer to page 94) (131 473 439) (115 654 666)

profit/(Deficit) for the period before taxation 4 099 028 19 689 907

2011 2010

R R

expenditure

Asset write-off 169 076 356 045

Advertising 3 154 419 2 896 831

Auditors' remuneration 637 503 517 155

Bad debts (including the movement for provision on impairment of trade receivables) 299 062 3 065 283

Bank charges 548 414 606 669

Catering materials 2 787 689 2 709 507

Cleaning 4 864 631 4 275 587

Computer expenses 3 358 337 2 052 308

Contract labour 8 539 383 8 127 831

Consulting fees 2 329 722 1 818 372

Depreciation 20 651 385 19 803 854

Directors' remuneration 236 589 226 295

Electricity and water 8 073 497 6 394 745

Entertainment 173 942 115 843

Fines and penalties — 1 229

General expenses 50 354 50 870

Hire of equipment 325 305 350 936

Impairment 16 091 344 —

Insurance 1 015 323 1 313 338

Finance costs 61 176 6 459

Legal expenses 346 686 250 720

Loss on foreign exchange — 160 334

Motor vehicle expenses 39 245 37 056

Management fees 972 994 9 305 510

Operational costs 1 440 086 1 575 259

Postage 2 990 29 574

Printing and stationery 296 191 246 680

Rates and refuse 5 569 502 3 393 724

Rent 393 704 1 473 298

Rental for parking 2 354 124 2 006 389

Repairs and maintenance 7 621 363 7 185 481

Employee-related costs (note 17) 30 640 127 27 643 062

Security 4 171 646 4 329 038

Sponsorship — 16 579

Staff welfare 364 392 296 762

Subscriptions 166 026 214 572

Telephone and fax 1 029 146 897 698

Training 1 512 184 663 860

Travel – local 180 312 205 940

Travel – overseas 1 005 570 1 033 973

Total expenditure 131 473 439 115 654 666


Detailed income statement (continued)

DIRECTORATE AND ADMINISTRATIONfor the year ended 30 June 2011

Directors

Am BoraineChairmanNon-executiveAppointed: 17/10/2006

R toefyCEOExecutiveAppointed: 01/03/2008

sA fisher (Dr)Non-executiveAppointed: 09/02/2007

mA GierdienNon-executiveAppointed: 17/10/2007

Ds JackNon-executiveAppointed: 05/07/1999Resigned: 05/05/2011

s montsiNon-executiveAppointed: 16/10/2007

tm pasiweNon-executiveAppointed: 05/07/1999

JK patherCOOExecutiveAppointed: 26/08/2011

lf platzky (Dr)Non-executiveAppointed: 01/08/2005

Bn RobertsNon-executiveAppointed: 27/11/2008

AC seymour (CA(sA))Non-executiveAppointed: 10/02/2009

DC skeateNon-executiveAppointed: 05/07/1999

hJ taljaardNon-executiveAppointed: 05/07/1999

Board committees

Audit CommitteeAC Seymour (Chairman)SA Fisher (Dr)TM PasiweDC Skeate

Remuneration CommitteeHJ Taljaard (Chairman)AM BoraineS MontsiDC Skeate

nominations CommitteeAM Boraine (Chairman)LF PlatzkyAC Seymour (CA(SA))

CtiCC expansion CommitteeAM Boraine (Chairman)SA FisherDC SkeateBN Roberts

Administration

Company Registration Number1999/007837/07

Registered OfficeConvention Square1 Lower Long StreetCape Town8001

PO Box 8120Roggebaai8012

Company secretaryMM ThirionAppointed: 1 August 2006PO Box 8120, Roggebaai 8012

AuditorsOffice of the Auditor-GeneralPrivate Bag X1, Chempet 7442

principal BankersABSA Bank Ltd a member of the Barclays GroupPO Box 7735, Johannesburg 2000

Attorneys DLA Cliffe Dekker Hofmeyr, a member of the DLA Piper GroupPO Box 695, Cape Town 800

Convention Square, 1 Lower Long Street,Cape Town 8001, South Africa

GPS co-ordinates: 33° 54’ 56” S by 18° 25’ 36” E

Tel: +27 21 410 5000 Fax: +27 21 410 5001

E-mail: [email protected]: www.cticc.co.za